3 min read.Updated: 26 Dec 2021, 11:57 PM ISTVarun Sood
At stake is prime Delhi real estate, in addition to family control of Dish TV
Essel Group founder Subhash Chandra stands to lose an expensive piece of real estate located in the heart of Delhi in addition to his family’s control of Dish TV amid a legal battle with Yes Bank over unpaid loans.
In addition to having pledged his family’s 25% holding in Dish TV India Ltd to borrow money from Yes Bank, Chandra had also pledged his bungalow, spread over 2.8 acres at 4, Bhagwan Das Marg, according to court orders accessed by Mint.
Yes Bank is repossessing the property, located close to the Supreme Court. Chandra stopped servicing the loan a couple of years back.
The case inadvertently came under the spotlight after a Jaipur debt recovery tribunal (DRT) restrained Yes Bank from exercising its rights on the shares it owned in Dish TV instead of pronouncing an order in the property case. This prompted Yes Bank to file a lawsuit in the Delhi high court, which dismissed the DRT order while making scathing observations.
“We are completely shocked and aghast to read the impugned order and the manner in which the presiding officer of DRT, Jaipur, Vivek Saxena, has proceeded," said an order, dated 24 December, by a two-judge bench of Justices Vipin Sanghi and Jasmeet Singh. “Either he (Saxena) was ignorant of the aforesaid developments—for which the respondents are responsible—or he has exhibited complete lack of judicial discipline."
“It may be noted that the respondents (Greatway Estates Pvt. Ltd ) are neither the owners nor the pledgers of the shares. The securitization application pending before DRT for consideration... relates to the action taken by the petitioner (Yes Bank) for taking over the mortgaged asset and for liquidation thereof to realize outstanding dues. We are at a complete loss to understand as to how the respondents could have any interest in the pledged shares, which were not pledged by them, and as to how the tribunal could have passed an interim order in respect of the pledged shares," said the order.
Chandra spent ₹300 crore in 2015 to buy the central Delhi bungalow, although his complaint before DRT, Jaipur, pegs its value at ₹1,000 crore, according to a separate legal filing, reviewed by Mint. Dish TV had a market cap of ₹3,360 crore as of 24 December.
In 2016, Chandra pledged about 25% of his family’s holding in Dish TV, his bungalow in Delhi and two other properties for the ₹4,210 crore loan given by Yes Bank. After Essel Group failed to service the loan, Yes Bank invoked the shares pledged with it in June last year and started taking possession of the properties. Dish TV’s promoters owned the shares through World Crest Advisors, whose separate appeal made last week before the Bombay high court, questioning the ownership of shares by Yes Bank, was dismissed. The Bhagwan Das Marg bungalow was owned through another promoter entity, Greatway Estate, which had questioned Yes Bank’s efforts to repossess the property before a DRT in Jaipur.
“In the present matter, arguments on IA No 1410/2021 are to be heard, and on account of hearing of a number of cases, the hearing is not possible, accordingly both the parties are directed to argue the matter on IA No 1410/2021 on 29.12.2021 through VC at 4:00 pm. Till then, both the parties shall maintain status quo with regard to enforcing their right on the shares," said the order of the DRT in Jaipur on Thursday.
Yes Bank challenged this order of DRT in the Delhi high court on Friday. “The tribunal was obliged to give reasons before passing the interim order, so seriously affecting the rights of the petitioner herein. They are conspicuous by their absence. We, therefore, stay the operation of the impugned order till further orders," said the high court.
Yes Bank and Dish TV are locked in multiple legal battles as Dish TV runs the risk of seeing all the three resolutions, including adopting financial accounts, the reappointment of a director and cost to the auditor, getting defeated at the company’s annual general meeting on 30 December. This is because Yes Bank is the largest shareholder, owning 25.63%, while promoters, led by chairman Jawahar Goel, own 5.93% in Dish TV.
Chandra, who is Goel’s elder brother, has agreed to cede control of Zee Entertainment Enterprises Ltd after a revolt from the largest shareholder, Invesco, the US asset management firm, prompted him to merge the company with Sony Pictures Networks India Ltd.
On 21 December, Sony and Zee signed a definitive agreement to merge the firms, in which Sony will control 51% of the merged entity and retain the right to nominate most of the members of the board while Chandra will retain his 4% shares and his elder son, Punit Goenka, will continue to be chief executive for five years.
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