The board of direct-to-home (DTH) operator Dish TV now has only one independent director in bureaucrat Shankar Aggarwal after academician Rashmi Aggarwal, the other independent director, exited the board on September 25, when the company’s annual general meeting was held. Her departure came after she had completed her tenure at the firm, Dish TV said in a regulatory filing.
Rashmi Aggarwal first came into the spotlight when Yes Bank sought to remove her along with four other directors as part of its move to tackle corporate governance issues at the company two years ago.
Aggarwal’s exit is significant since Dish TV has among the thinnest boards in Corporate India, with CEO Manoj Dobhal, CFO Rajeev Kumar Dalmia and Company Secretary Ranjit Singh being its members, besides Shankar Aggarwal. The Securities and Exchange Board of India (Sebi), for the uninitiated, has mandated six independent directors on the boards of listed companies for it to function smoothly.
Dish TV’s depleted board follows a legal tussle between the company’s promoters (the Goel family with a 4.04% stake) and the DTH operator’s largest shareholder Yes Bank over board reconstitution. Yes Bank transferred its 24.19% stake in Dish TV to JC Flowers Asset Reconstruction Co. last year.
In August, media reports had emerged that Essel group chairman and Jawahar Goel’s brother Subhash Chandra was likely to settle the Rs 6,500-crore debt taken from JC Flowers Asset Reconstruction Co (ARC) for around Rs 1,500 crore. With this, Chandra would likely regain his family’s stakes in Dish TV and Zee Learn. He would also get back three properties, one of which is a bungalow in central Delhi.
However, these efforts suffered a setback last week, when the Bombay High Court rejected a plea by Dish TV’s promoter entity World Crest Advisors, which sought to prevent Yes Bank and JC Flowers Asset Reconstruction from transferring or encumbering Dish TV shares.
At Monday’s AGM, shareholders also rejected the appointment of Dish TV’s chief technology officer Veerender Gupta as a whole-time director (WTD) of the firm. Gupta was appointed as a WTD by the company’s management on June 26, subject to shareholder approval. Besides his role as CTO, Aggarwal also heads the OTT division of the company.
Gupta’s rejection followed a series of shareholder rejections of independent directors over the last few months at the firm. For instance, shareholders did not approve the appointment of Sunil Kumar Gupta, Madan Mohanlal Verma, Gaurav Gupta and Lalit Behari Singhal in March, with the company rejecting the move by a clutch of shareholders in June to appoint three of their nominees to the board.
“At this stage, there is no clarity on what is happening with the proposed settlement or what is the way forward with the company. Second, as the biggest shareholder in the company, Yes Bank, which has transferred its stake to JC Flowers, will need to take the lead in terms of management of the company by reconstituting the board. It should also try bringing in a new management to run the company,” Shriram Subramanian, founder and Managing Director at InGovern, a proxy advisory firm said.