The country’s third largest satellite television provider has now seen the ouster of 16 directors since September 2021, as agitated investors display their displeasure against the promoters of the company by voting against their board appointments.

On Thursday, at an extraordinary general meeting (EGM) of shareholders, upwards of 80% of the votes cast were against ratifying the appointments of Sunil Khanna, Bhushan Puri and Sonal Bankim Parekh as directors on the company’s board, as per regulatory filings.

Subsequently, the Shubhash Chandra family promoted company appointed Ritu Kaura as an independent director with immediate effect as its board strength fell below the legally mandated limit of three.

The company’s board presently consists of Kaura and Manoj Dobhal, the chief executive and executive director of the company.

Kaura’s appointment to the board is yet to be approved by the Ministry of Information and Broadcasting, as required for the appointment of directors and senior executives at television broadcasting companies. However, as Dish TV was left with just one director on the board, the company in a filing to the exchange said Kaura’s appointment “becomes effective immediately i.e. March 21, 2024.”

This is an all too familiar pattern for the company that found itself in a similar situation just three months ago, when shareholders booted out its entire board, triggering immediate board appointments without ministry approval.

Kaura and Dobhal were appointed as directors by the company’s board just a week ago on 15 March, likely in anticipation of the EGM on Thursday. While Dobhal’s appointment was immediate, since he already received government approval when he was appointed the chief executive of the company, Kaura’s appointment was pending ministry approval.

In India, a listed company’s board can appoint directors but the appointment is required to be ratified by shareholders within three months. Dish TV will have to seek shareholder approval for the appointment of Kaura and Dobhal within three months.

Dish TV did not comment.

The deadlock between shareholders and the promoters at Dish TV dates back to September 2021, when Yes Bank Ltd, the largest shareholder, pressed the board of Dish TV to convene a special shareholder meeting. It was seeking a reconstitution of the board of Dish TV, expressing its unhappiness with the way the company was run.

Jawahar Goel, who owns 4.04% of Dish TV, is facing displeasure from shareholders unhappy with what they believe is poor corporate governance. Shareholders have raised concerns about the company’s investments in its OTT (over-the-top) platform Watcho and the composition of the board, among other issues.

Dish TV has denied any wrongdoing.

“The problem is that neither of the two sides is showing a decisive and compelling path forward for the company,” said Shriram Subramanian, founder and MD of InGovern Research Services.

“Until this deadlock between the promoters and the largest shareholder continues, there is no way out of this stalemate. Somebody has to take the lead and find a resolution. Until then, the interests of other minority shareholders are in jeopardy,” he said.

Subhash Chandra, the elder brother of Goel and chair of the Essel Group, had borrowed about ₹5,000 crore from Yes Bank in 2016. His inability to service the loans made the lender invoke the nearly 25% shares that were pledged as guarantees. In December 2022, Yes Bank transferred its shares to JC Flowers Asset Reconstruction Co., which became the largest shareholder with a 24.19% stake in the company.

Over the past 33 months, Dish TV has declined to convene a special shareholder meeting while minority investors have booted out 16 directors, including former chief executive Anil Dua and chairman Jawahar Goel.

Last year, Chandra agreed to pay ₹1,500 crore against dues of ₹6,500 crore to JC Flowers to buy back the shares. But Chandra is still to pay back the entire amount to JC Flowers, making the largest shareholder continue to vote against the director appointments.

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Published: 22 Mar 2024, 08:43 PM IST