Shareholders of Dish TV reject the induction of four directors

On Friday, Dish TV, which conducted an extraordinary general meeting, only 25.9% of shareholders voted in favour of Sunil Gupta, Madan Mohanlal Verma, Gaurav Gupta and Lalit Behari. 74% of investors voted against the appointment of the four directors, who were inducted into the board in December.

Dish TV’s board now is left with only two independent directors, Rashmi Aggarwal and Shankar Aggarwal, which is less than the minimum number of six directors on a board, as required by the market regulator, the Securities and Exchange Board of India.

“The Board shall take necessary steps for complying with the requirement of the Companies Act, 2013, and SEBI Listing Regulations in respect of the number of the Directors on the Board,” Dish TV told the exchanges.

Shareholders first voted against the reappointment of Ashok Kurien in December 2021, followed by rejecting the continuation of former Dish TV chairman Jawahar Goel and chief executive Anil Dua in the summer of last year. Investors also rejected the induction of independent directors Rakesh Mohan and Rajagopal Venkateish.

Back in September 2021, Yes Bank Ltd blew the bugle for investor revolt when unhappy over how the company was run, it demanded a board reconstitution, including appointing seven directors.

Dish TV dismissed Yes Bank’s allegations of corporate misconduct and has since then rebuffed the shareholder’s demands for holding a special shareholder meeting. Since then, both Yes Bank and Dish TV have spent quite a sum in enlisting an army of lawyers to get the courts to adjudicate if a shareholder that owns more than 10 percent of shares indeed retains the right to call for a special shareholder meeting.

Essel Group founder Subhash Chandra had borrowed over ₹5,000 crore from Yes Bank, and his inability to service the loans made the lender invoke the Dish TV shares that were pledged with the bank. In December last year, Yes Bank transferred its shares to JC Flowers Asset Reconstruction Co, making the asset reconstruction company the largest shareholder, owning 24.19%.

Chandra’s family as promoter owns 4.04% shares as of 31 December.

Earlier this week, minority investors of Dish TV made a stunning revelation and complained to the Exchanges and the market regulator that the company was deliberately not inducting the directors recommended by the largest shareholder. This was after it found that the company had inducted a majority of the directors on its board despite the Ministry of Information and Broadcasting (MIB) approving their appointment in December last year. Investors were further riled that the company had not disclosed this information to the Exchanges and it got this communication through a reply from MIB under the Right To Information Act.

Minority investors were peeved that despite MIB stamping the candidature of Girish Paranjpe, Arvindnachya Chandranachya and Haripriya Padmanabhan, the three directors recommended by Yes Bank, Dish TV were delaying their induction on the board.

Dish TV for now has said that the allegations of a group of minority investors “are wrong, malicious, incorrect, and baseless and hence are denied”

Some investors are unconvinced and are demanding a probe from the Sebi.