The board of Dish TV on Wednesday rejected a proposal of Yes Bank Ltd seeking a special shareholders’ meeting for a drastic management change, including sacking the satellite TV operator’s managing director Jawahar Goel.
The board took the unanimous decision that the extraordinary general meeting (EGM) sought by the private lender cannot be called as the proposal requires certain prior regulatory approvals, Dish TV said in an exchange filing.
In addition to sacking Goel, the younger brother of Essel Group founder Subhash Chandra, Yes Bank wants shareholders to vote on its proposals to terminate four other directors and induct two Yes Bank executives as nominee directors and five independent directors.
“Post detailed deliberations, and consideration of the above said facts, advice and opinions, the board was of the opinion that inter alia owing to YBL (Yes Bank Ltd) being a banking company and YBL’s shareholding in the company being a consequence of invocation of pledges, there are certain embargos under the provisions of the Banking Regulation Act, 1949, read with Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, because of which the said resolutions cannot be placed before the shareholders,” Dish TV said in its filing.
It added that Yes Bank failed to take certain prior steps under the Takeover Regulations 2011 and the Competition Act 2002. The bank also failed to take prior approval of the information and broadcasting ministry for national security clearance as well as that of the company’s lenders for the appointment of new board members, it said.
Mint reported on Monday that Yes Bank could take Dish TV to court if the company’s board fails to convene an EGM. If the matter reaches the National Company Law Tribunal (NCLT), it will mark a rerun of the Zee Entertainment Enterprises-Invesco spat in which Chandra is locked in a legal battle with Zee’s largest shareholder Invesco.
Yes Bank demanded the holding of the special shareholders’ meeting in a 21 September letter, which was received by Dish TV on 23 September.
Under the rules governing publicly traded companies, a company is expected to announce a date for an EGM within three weeks if demanded by a shareholder with at least 10% stake.
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 in content platform Watcho.
Goel and his family hold a 5.93% stake in Dish TV, of which about 40% of the shares are pledged with creditors.
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