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Bengaluru: The 16-month-long fight between Yes Bank Ltd and the Subhash Chandra family for control of Dish TV India Ltd refuses to end anytime soon after the satellite television provider agreed to induct three independent directors on its board while it refused to get any of the seven directors proposed by its largest shareholder.

On Tuesday, Dish TV told exchanges that it had agreed to induct three independent directors-- Sunil Gupta, Madan Mohanlal Verma and Gaurav Gupta-- even as it decided to convene its Annual General Meeting on 29 December.

But many investors believe that all three directors run the risk of being booted out as Dish TV has not considered getting a single director from the list of seven directors first proposed by Yes Bank in its letter dated 5 September last year.

“Investors will again be forced to reject the appointment of these directors simply because the company is not listening to its shareholders and acting unilaterally when it comes to constituting the board," said an investor, on the condition of anonymity.

The investor owns a little over 1% of Dish TV.

Yes Bank, which owns 24.78% and is the single largest shareholder of Dish TV, has alleged corporate misgovernance and sought a reconstitution of Dish TV’s Board.

For this reason, since December last year, shareholders have voted against the reappointment of Ashok Kurien, former Dish TV chairman Jawahar Goel and chief executive Anil Dua. During this time, shareholders have rejected the induction of two other independent directors that Dish TV wanted to induct into the board.

Consequently, Dish TV’s board now has only two independent directors, Shankar Aggarwal and Rashmi Aggarwal (both are unrelated) and this is less than the minimum number of six directors as stipulated by the Securities and Exchange Board of India, the market regulator. For this reason, both the Bombay Stock Exchange and National Stock Exchange imposed a 4,60,000 fine on Dish TV last month.

In August, Dish TV said it would induct three independent directors Sunil Gupta, Uday Varma and Madan Mohanlal Verma. During the same time, the company also said Girish Paranjpe, Arvind Nachaya Mapangada and Haripriya Padmanabhan could also be inducted into the board. Then Dish TV said that the six directors could join the board after the information and broadcasting ministry approved their candidature.

Paranjpe, Mapangada and Padmanabhan were part of the seven directors Yes Bank had proposed in September last year when, alleging corporate misgovernance, it sought reconstitution of Dish TV’s board.

“It’s close to four months and the company has not shared any update on what happened to MIB approval on the three directors proposed by Yes Bank," said another investor, who owns a little over 0.5% shares.

But at least one proxy advisory believes the onus lies on the largest shareholder of Dish TV to end this stalemate.

“Look, the onus lies with Yes Bank. They are the largest shareholder. They need to assert themselves much better and engage with the company and regulators to get some members on the board so that the company can be run better," said Amit Tandon, founder and managing director at IiAS, the proxy advisory firm.

Dish TV is finding it difficult to induct directors on the Board as numbers are stacked against it: Goel, the younger brother of Chandra, owns 4.04% shares while Yes Bank is the largest shareholder.

Yes Bank’s petition before a company court in Mumbai asking the court to direct Dish TV to convene an extraordinary general meeting is expected to be heard on 12 December.

ABOUT THE AUTHOR

Varun Sood

Varun Sood is a business journalist writing on corporate affairs for the last fifteen years. He also writes a weekly newsletter, TWICH+ on the largest technology services companies. He is based in Bangalore. Varun's first book, Azim Premji: The Man Beyond the Billions, was brought out by HarperCollins in October 2020.
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