Dish TV’s shareholders seek Sebi, MCA intervention for EGM
PremiumShareholders have urged the two regulators to direct the firm to convene a special shareholder meeting
MUMBAI : A group of minority shareholders owning about 4% of Dish TV India Ltd have complained to the Securities and Exchange Board of India and the ministry of corporate affairs (MCA) alleging a lack of corporate governance at the company. They have urged the two regulators to direct the satellite television provider to convene a special shareholder meeting, a demand first made by Yes Bank India Ltd, the largest shareholder, 11 months ago.
Dish TV has still not filed shareholder-approved financial statements for FY 2020-21 with the nodal agency of MCA, the shareholders said in a letter dated 7 July. This is a violation of the current rule of the Companies Act, they pointed out.
“By delaying the EGM as demanded by more than 10% of the shareholders, a board that does not enjoy the confidence of shareholders and which has mismanaged the company and meaningfully impaired shareholders’ value, is seeking to perpetuate its misgovernance," said the letter, written by Rajeev Sangoi, representing the minority investors. Sangoi owns a little more than 0.7% of the shares of Dish TV, according to an executive familiar with the matter.
“The current situation requires an urgent intervention by regulators to ensure that the board complies with the rule of law and calls the EGM as demanded by the shareholders. We also request you to initiate prosecution of the current board, particularly the independent directors, for multiple instances of governance failures," the letter read.
“The company is furnishing necessary details as being asked for by its shareholders and/or regulator in timely manner" a Dish TV spokesperson said in an email, declining to comment on specific queries. Section 137 of the Companies Act mandates that every company file a copy of the financial statements approved by shareholders within a month of the annual general meeting.
Dish TV has not been able to file its financials as its shareholders delivered a stinging rebuke to the company with a majority of them rejecting all three resolutions, including the adoption of financial statements, at the AGM on 30 December last year.
Last month, shareholders again expressed their unhappiness with 78.9% of investors voting to reject the continuation of Jawahar Goel as managing director of the company. Goel, who is the younger brother of Essel Group founder Subhash Chandra and who owns 5.93% of Dish TV, stepped down as managing director but continues to serve as a non-executive director. This is because Dish TV, before it went public in 2007, brought in a resolution making Goel a non-retiring director.
The trouble at Dish TV started in September last year when it faced a revolt by its largest shareholder, Yes Bank. Alleging corporate misgovernance, Yes Bank, which owns 24.78% of Dish TV’s shares, sought reconstitution of the board, including the removal of five directors and induction of seven members. Dish TV has rejected Yes Bank’s demands and both parties have turned to the courts for adjudication.
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In the last 11 months, shareholders have voted against four director appointments. Investors first voted out Ashok Kurien as director in December. They then voted against the continuation of Goel, the managing director, and Anil Dua, the former chief executive officer last month. They also rejected the appointment of independent director Rajagopal Venkateish.
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