Mumbai Yes Bank Ltd. is finalizing the paperwork to prosecute satellite television operator Dish TV India Ltd for refusing to hold a special shareholders’ meeting, three people familiar with the matter said.
The private lender, Dish TV’s largest shareholder with 25.63% stake, will ask the National Company Law Tribunal (NCLT) to direct the company to either share the shareholder details, so that it can convene the meeting itself, or allow it to fix a date. give instructions to For an extraordinary general meeting (EGM), the people cited above said on condition of anonymity.
“The paperwork is on,” said one of the three people cited above. “The bank can file the petition on Thursday or when it is completed, it can be done by Friday at the latest.” This development will mark the beginning of a legal wrangling over the control of Dish TV. Yes Bank is upset with the existing board and has demanded an EGM where shareholders can vote on a resolution to sack managing director Jawahar Goyal and four independent directors and approve the induction of seven directors.
Yes Bank decided to move the NCLT after Dish TV reiterated its stand on October 14 that removal or appointment of directors would require prior approval from the Ministry of Information and Broadcasting, rejecting the bank’s demand to convene an EGM. The company also said that accepting Yes Bank’s demand to remove Goyal and others would be in violation of the Takeover Regulations 2011 and the Competition Act.
Subsequently, Yes Bank in a letter dated October 16 asked Dish TV whether the company could share details of shareholders, including address and email, as the bank itself could convene an EGM, according to officials cited earlier.
According to another executive, Dish TV again considered Yes Bank’s request “arbitrary”.
This convinced Yes Bank that its only option was to seek the help of the courts to convene a special shareholders’ meeting.
“The action of Yes Bank is arbitrary as the rules of MIB are clear. We had consulted top lawyers of the Supreme Court and both of them suggested that the bank’s action was arbitrary.”
Yes Bank’s legal dispute with Dish TV will revive the Zee Entertainment Enterprises-Invesco dispute in which Goyal’s elder brother Subhash Chandra is locked in a legal battle with Zee’s largest shareholder Invesco.
Some experts gave a thumbs up to the approach adopted by Yes Bank, which claims it has an additional 20% shareholder support, taking the total shareholder support for the bank’s recommendations for board restructuring to 45%.
The Goyal family holds a 5.93% stake in Dish TV, of which around 40% is pledged with creditors as of September 30.
Amit Tandon, founder and managing director of proxy advisory firm IIAS, said, “This is a logical move for Yes Bank as it becomes very impractical for the bank to call for an EGM without shareholders’ details.” It is doing this in a systematic manner, but the further question is how the courts decide, and for this reason, it could be a protracted battle, as in the case of Zee-Invesco.
An email sent to Yes Bank seeking comment remained unanswered.
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