Amid a tussle over board representation at direct-to-home company Dish TV, minority shareholders of the firm, represented by Vis Legis, have moved a resolution to convene an extraordinary general meeting (EGM) to appoint three new directors and remove two long-term directors. The shareholders cited a complete loss of faith in the credibility of the board.
The minority shareholders collectively own a 10.15% stake in the company. A stock exchange filing says they have requested reorganisation of the company board to remove Shankar Aggarwal and Rashmi Aggarwal, its long-term directors.
"The existing Independent Directors have a long-term association with Dish TV and Essel group which cast doubt over their independence," shareholders’ statements filed with the stock exchanges said.
Notably, Rashmi held directorship in other Essel group entities -- Dish Infra, Zee Media, and Essel till February 2019, while Shankar held directorship in Essel Infraprojects, a defaulter entity with YES Bank and several other lenders, till November 2018.
According to the representation, the independent directors, who now constitute the majority of the board, have failed to perform their “statutory duty” to bring an “unbiased and independent judgment”, especially on key appointments on the board.
In light of this, the minority shareholders have sought the appointment of three new directors, K Badri Narayanan, Satish Kumar Yanmandra, and Jeet Sen Gupta, to the Dish TV board.
Notably, YES Bank held the largest 24% stake in Dish TV, while the promoter group owns 4.04% of the listed company. In March 2023, the company shareholders rejected the appointment of four independent directors on its board after former chairman Jawahar Lal Goel stepped down in September 2022.
The shareholders allege that Goel continued as additional director upon rejection of his re-appointment as MD by the stakeholders. "It was only after the intervention of the shareholders that he subsequently resigned as additional director."
"Dish TV refused to call upon the EGM citing upfront MIB approval of the directors while the company has in the past, the appointment of its Managing Director Mr. Jawaharlal Goel in 2015, 2018, and 2020 and appointment Mr. Anil Dua (as whole-time director) in 2019 was done subject to necessary regulatory approvals," the statement said.
It added that it is the clear position in law under section 100 of the Companies Act that the board is obliged to call a meeting of the shareholders if a requisition is made by shareholders holding more than 10% shareholding in the company.
Shareholders have alleged the board is not acting in line with good corporate governance standards and is not a fair representation of the incumbent major shareholders being various banks and financial institutions holding 45% stake in the company. "The board is purportedly acting at the behest of certain minority shareholders holding merely 4% of the shares in the company," it alleged.
Dish TV India reported a 21.5% decline in revenue at ₹504.8 crore for the March 2023 quarter, while its net loss stood at ₹1,720.6 crore as compared to ₹1,997.6 crore in the same period last year.
Amid the development, Dish TV shares are trading down 3.27% at ₹15.99 today as compared to the previous session close of ₹16.53. The stock touched its 52-week high of ₹24.45 on December 2, 2022.
