Bombay HC clears decks for Yes Bank vote at Dish EGM

The legal tussle between Yes bank and Dish TV started in January when the latter moved the Bombay High Court seeking to prevent Yes Bank from voting at the EGM

Priyanka Gawande
Updated24 Jun 2022
The Bombay HC
The Bombay HC

A question mark hangs over the continuation of Jawahar Goel as chairman of Dish TV India Ltd, with the Bombay high court on Thursday dismissing a promoter entity’s petition seeking to block a crucial Friday vote by Yes Bank to oust Goel as the company’s managing director.

A single-judge bench had already rejected Dish TV promoter entity World Crest’s petition earlier this week, after which it moved the division bench.

“World Crest has not made any case. The single judge is right in rejecting the ad-interim relief restraining Yes Bank and Catalyst Trusteeship from voting in the EGM on 24 June; the appeal is dismissed,” the bench of Justices Gautam S. Patel and M.J. Jamdar said. The order follows two days of arguments by World Crest Advisors LLP and Yes Bank, Dish TV’s largest shareholder with a 24.78% stake.

World Crest had based its argument significantly on a recent Supreme Court order related to PTC India Financial Services that said lenders or pledgees are not owners of shares and cannot exercise voting rights once the pledged shares are invoked. However, the division bench rejected this argument saying in this case, it “did not meet the equitable principles in law.”

Goel, whose previous term ended in March, is seeking shareholder approval for a three-year stint; however, this seems doubtful with Yes Bank determined to oust Goel since September last year, when the private sector bank first sought a board reconstitution. Goel, the younger brother of Essel Group founder Subhash Chandra, owns 5.93%.

According to Securities and Exchange Board of India’s rules, the appointment of a director has to be approved by 75% of shareholders within three months. However, World Crest may still petition the apex court to intervene, according to an executive familiar with the development.

At the heart of the legal tussle was Dish TV’s contention that Yes Bank was not the nominee of Catalyst Trusteeship Ltd, the entity with which World Crest had pledged its shares. For this reason, Dish TV’s counsel argued that Catalyst Trusteeship could not have transferred the pledged shares to Yes Bank.

Investors, led by Yes Bank, are expected to vote against the Dish TV board’s proposal to extend Goel’s term for another three years and appoint Rajagopal Venkateish as an independent director, Mint reported on 20 June.

However, investors are in favour of chief executive Anil Dua’s reappointment. If Goel is voted out, it will be the first time since Dish TV was founded in 2003 that the company will not have a member of the Chandra family on its board.

Last December, shareholders delivered a stinging rebuke to the firm, with a majority of them rejecting all its three resolutions, including the re-appointment of Ashok Kurien. Kurien subsequently resigned.

Besides Goel and Dua, Dish TV’s board comprises independent directors B.D. Narang, Rashmi Aggarwal and Shankar Aggarwal. Narang’s term is also coming to an end.

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