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MUMBAI : Yes Bank Ltd, the largest shareholder of Dish TV India Ltd, has urged the satellite television service provider to hold an extraordinary general meeting (EGM) and act on its recommendations to reconstitute the company’s board.

On Tuesday, Yes Bank sent a letter with a fresh demand to hold an EGM after Dish TV postponed its annual meeting scheduled for 27 September to an unspecified date. Yes Bank believes this is a tactic to delay things, two executives privy to the development said, requesting anonymity.

“We had shared the form they (Dish TV) had asked us to fill on behalf of the prospective directors, which was to be sent for MIB (ministry of information and broadcasting) approval. But we did not see any movement from their side," said one of the two executives. “Hence, the next step was to send out this notice so that they act within a time period."

Dish TV is expected to inform the exchanges about the letter on Thursday. It will have time till 12 October to call an EGM. If Dish TV refuses to do so within 21 days, Yes Bank could issue a notice for a shareholders’ meeting after giving them three weeks’ notice and ask them to vote on its recommendations to sack its managing director Jawahar Goel, along with four other directors. Goel is the younger brother of Zee Group’s Subhash Chandra.

Dish TV has not yet sought regulatory clearances from the information and broadcasting ministry for naming new directors to its board, said the second executive. Mint could not independently verify Yes Bank’s claim.

“The bank has responded to them with specific instances in the case of Dish TV where it took approval from shareholders for appointing directors, including promoter Jawahar Goel and also cited examples of other companies," the second executive added.

An email query to Dish TV did not elicit any response.

Yes Bank, which owns a 25.63% stake in Dish TV, is peeved with the board on its decision to go ahead with a proposed rights issue, despite the bank’s objections, besides certain investment decisions, including the one in content platform Watcho.

The tussle between the private sector lender and the satellite TV operator became public when Yes Bank sent a letter on 3 September asking Dish TV to seek shareholders’ vote to remove Goel and four other directors, besides appointing seven new members on the board, including two nominee directors of the bank. On 6 September, Dish TV said any change on the board can be done only after an approval from MIB.

Subsequently, after consulting law firm Cyril Amarchand Mangaldas on the issue, Yes Bank told Dish TV that the ministry’s approval can be sought once the appointment of directors has been approved by the shareholders.

According to proxy advisory firms, it is not clear if there is a rule for listed media companies to seek prior approval from the broadcasting ministry on the appointment and removal of directors. Institutional Investor Advisory Services analysed over 274 resolutions on appointments and removal of directors at listed media companies from 1995 to say that only in nine earlier instances, media companies had sought approval from the ministry.

Yes Bank also wants to complete the reconstitution of the board of Dish TV before the end of the year, considering that beginning next year, all board appointments and removal would require support from a larger number of shareholders. Until 31 December, the removal and appointment of independent directors require a simple majority.

gopika.g@livemint.com

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