OPEN APP
Home / Companies / News /  SC slams, sets aside police action in Yes Bank-Dish TV case
Listen to this article

The Supreme Court on Tuesday set aside a Noida police directive that barred Yes Bank Ltd from exercising its rights over the shares it owns in Dish TV India Ltd and stayed the ongoing police probe, saying such actions can have “dangerous consequences".

The top court’s order allows Yes Bank, the satellite-TV provider’s largest shareholder with a 25.63% stake, to continue its now over-two month battle for a board reconstitution at Dish TV.

Jawahar Goel, chairman and managing director and the younger brother of Essel Group founder Subhash Chandra, owns 5.93% of the shares.

A three-judge bench headed by Justice D.Y. Chandrachud made scathing observations about how Noida police seized the shares held by Yes Bank on a 12 September complaint by Chandra.

“We cannot permit police officers sitting in Gautam Buddh Nagar to freeze shares and voting rights of a shareholder," Chandrachud said, adding that the police action will allow a “lawless state of affairs". “The police here did what even the National Company Law Tribunal did not do…there cannot be short-circuiting of the judicial process by using police action. Using criminal procedure to achieve results of civil proceedings will have dangerous consequences," the bench observed.

“There shall also be a stay of further proceedings in connection with FIR No. 0821 dated 12 September 2020 lodged at Police Station Noida Sector 20," the order said.

The court will next hear the case on 12 January 2022.

At the heart of the current tussle between Yes Bank and Dish TV is the allegation by Subhash Chandra, Essel Group chairman, that he was arm-twisted by Rana Kapoor, the former boss of Yes Bank, in 2016 to merge Dish TV with Videocon D2H. Mint first reported details of Chandra’s complaint filed in September last year on 23 November.

Yes Bank’s counsel Abhishek Manu Singhvi said that the Uttar Pradesh police’s action was an “extraordinary ingenious misuse of the criminal law", and the notice on voting rights came at an opportune time to prevent the bank from voting in Dish TV’s annual meeting with shareholders.

Kapil Sibal, who represented Chandra, questioned the legality of a 4,210 crore loan made by Yes Bank to seven privately held firms of Essel Group.

In the meantime, Yes Bank and Dish TV’s battle will continue before a company court in Mumbai.

Yes Bank is pushing for a promoter change in the satellite-TV provider, alleging that the board is not acting in line with good corporate governance standards.

Dish TV denies this allegation, and the company maintains that it abides by the highest standards of corporate governance.

“Today’s order by the Supreme Court is a step forward for shareholder democracy in the country," an executive at Yes Bank said on the condition of anonymity.

“This order is again a reminder that no police station in any part of the country can seize property or shares without following the due legal process."

The apex court’s order came less than 12 hours after Dish TV told the exchanges on Monday evening that its board had decided to push back an annual general meeting (AGM) scheduled for Tuesday after the Registrar of Companies, Mumbai, approved its request for an extension.

Under the current rules governing listed entities, a company needs to convene an AGM within six months from the end of the fiscal year.

If a company is not able to conduct an AGM by 30 September, then it has to convene the meeting latest by the end of December.

On 27 September, Dish TV first pushed back the AGM scheduled on 30 September as the company said it needed time to examine the demands of its largest shareholder. Yes Bank, in a letter dated 3 September, demanded the removal of five of the current six directors at Dish TV and induction of seven directors on the board.

A month later, Dish TV again requested the Registrar of Companies to allow it time until 31 December to hold the AGM. However, a day after the Uttar Pradesh police seized the shares, Dish TV, on 7 November, told the exchanges that it would hold its AGM on 30 November.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Close
Recommended For You
×
Edit Profile
Get alerts on WhatsApp
Set Preferences My ReadsFeedbackRedeem a Gift CardLogout