Yes Bank Ltd is finalizing the paperwork to sue satellite television operator Dish TV India Ltd over its refusal to hold a special shareholders meeting, three people aware of the matter said.
The private lender, Dish TV’s largest shareholder with a 25.63% stake, will ask the National Company Law Tribunal (NCLT) to direct the company to either share shareholder details so it can call the meeting on its own, or instruct it to set a date for an extraordinary general meeting (EGM), the people cited above said on condition of anonymity.
“The paperwork is ongoing,” one of the three people cited above said. “The bank could file the petition on Thursday or depending on when it gets completed, it could be done latest by Friday.” The development would mark the beginning of a legal wrangle for control of Dish TV. Yes Bank, miffed with the current board, has demanded an EGM where shareholders could vote on its proposal to sack managing director Jawahar Goel and four independent directors, and approve the induction of seven directors.
Yes Bank decided to move NCLT after Dish TV on 14 October reiterated its stand that any removal or appointment of directors will need prior approval from the ministry of information and broadcasting, rejecting the bank’s demand to call an EGM. The company also said accepting Yes Bank’s demand to remove Goel and others would violate Takeover Regulations 2011 and Competition Act.
Subsequently, Yes Bank, in a letter dated 16 October, asked Dish TV if the company could share the details of shareholders, including addresses and emails, as the bank itself could convene an EGM, according to the executives cited earlier.
Dish TV again deemed Yes Bank’s request as “arbitrary”, according to the second executive.
This convinced Yes Bank that seeking the help of courts was its only option to convene a special shareholders’ meeting.
“Yes Bank’s action is arbitrary for the simple reason that MIB’s rules are clear. We had taken the advice of top Supreme Court lawyers and they both suggested that the bank’s action is arbitrary,” a Dish TV executive one of three cited above said.
Yes Bank’s legal tussle with Dish TV will mark a re-run of the Zee Entertainment Enterprises-Invesco spat in which Goel’s older brother Subhash Chandra is locked in a legal battle with Zee’s largest shareholder Invesco.
Some experts gave a thumbs-up to the approach undertaken by Yes Bank, which claims that it has an additional 20% shareholder support, taking the total shareholder support for the bank’s recommendations for a board reconstitution to 45%.
Goel’s family owns 5.93% in Dish TV, of which about 40% of the shares are pledged with creditors, as of 30 September.
“This is a logical step for Yes Bank as it becomes very impractical for the bank to call for an EGM without having the details of the shareholders,” said Amit Tandon, founder and managing director at IiAS, the proxy advisory firm. “The bank is doing it in a systematic way, but the question ahead is how the courts decide, and for this reason, it could be a long battle, just like in the case of Zee-Invesco.”
An email sent to Yes Bank seeking comment remained unanswered.
Source: Mint