Minority shareholders at Dish TV have flagged questionable investments made by the direct-to-home operator and said that its board has lost credibility and the trust of public shareholders. The shareholders, who Dish TV said on Monday have called for an extraordinary general meeting (EGM), have said the board is not acting in line with good corporate governance standards.
The minority shareholders hold a 10.15% stake in the company and include individual as well as institutional investors such as IndusInd Bank, Aditya Birla Capital and Phoenix ARC. While IndusInd Bank holds a 2.34% stake, Phoenix ARC holds 1.24%, according to Dish TV’s shareholding pattern as on March 31, 2023.
The shareholders have also sought the removal of two directors from the board.
The promoter family, led by Jawahar Lal Goel, has a 4.04% stake in the firm. Yes Bank, which is also seeking a reconstitution of the board, has transferred its 24.19% stake to JC Flowers Asset Reconstruction, as per the firm’s shareholding pattern for the March quarter.
Speaking to FE, Rahul Hingmire, partner at Vis Legis Law Practice, a Mumbai-based law firm representing the 77 minority shareholders who have asked for the EGM, said one of questionable investments was `1,218 crore Dish TV put into its over-the-top platform Watcho in FY20.
“This was 20% of the total net block of the fixed assets, intangibles, investments and capital WIP (work in progress) of `6,012 crore in FY20. This investment was qualified in FY20 and in FY21. Upon lenders and investors questioning the investment, the company has made an impairment of `203 crore in FY22,” Hingmire said.
The two directors whose removal has been sought have a long association with Dish TV and Essel group, he said. Rashmi Aggarwal held directorship in other Essel group entities — Dish Infra, Zee Media, and Essel Forex — till Feb 2019, while Shankar Aggarwal was a director in Essel Infraprojects till November 2018.
The minority shareholders have also asked for the induction of three new directors: K Badri Narayanan, Satish Kumar Yanmandra and Jeet Sen Gupta.
“We have received the notice yesterday (Monday) and informed all the stock exchanges accordingly. As stated in the disclosure filed by the company, the same is being evaluated and shall be place before the board of the company. The company shall take all such actions and steps as may be required in terms of the applicable laws and procedure,” Dish TV said in response to an email from FE.
The promoter family of Dish TV has been embroiled in a legal tussle with Yes Bank over board representation for the last two years. The company has been unable to pass its annual statements for FY21 and FY22 and the feud led to the departure of former promoter-backed chairman Jawahar Goel in September last year.