The board of Dish TV Ltd (DTL) rejected on Wednesday, YES Bank’s demand to hold an extraordinary general meeting (EGM) to consider resolutions, citing regulatory limitations and absence of prior approvals from the government and lenders.
Private lender YES Bank, which holds 25.93 per cent stake stake in DTL, had sought the removal of DTL directors Jawahar Lal Goel and others, and appointment of the bank’s own nominees.
The bank had sought their removal for alleged hasty and arbitrary decisions to proceed with the rights issue despite objections raised by the lender.
DTL in filing with BSE said the board considered the factual background, the legal advice and the opinions received from various legal experts.
YES Bank is a banking company and its stake in DTL arises from the invocation of pledges shares. Hence, there are embargos under regulations and laws (Banking Regulation Act, 1949 and Sebi’s Substantial Acquisition of Shares and Takeovers regulations) which prevents it from placing resolutions before the shareholders.
YES Bank also needs to get prior approval from the government (Ministry of Information and Broadcasting) in respect of national security clearance, and company’s Lenders before placing such proposals before shareholders.
The board has considered its fiduciary duties and it shall be in violation of extant laws if it acts upon the Notice. The board unanimously agreed that the EGM cannot be called, as sought by the lender, the company said.
On September 21, YES Bank had asked DTL to call an EGM to induct its seven nominees on the board and remove Goel and four directors. The bank had lent Rs 3,000 crore to Essel group promoters, but as the Essel group promoters defaulted on loans, it invoked the shares pledged by the promoters last May.
Goel is the younger brother of Subhash Chandra, whose flagship firm ZEE Entertainment Enterprises announced a merger with its rival, Sony to create a $2 billion entertainment giant.