Dish TV: Supreme Court Lifts freeze of transaction and voting rights of DishTV, AGM postponed by a month
The top court ruling would have allowed the private lender, which holds a 25.6% stake in the satellite broadcast service provider promoted by Subhash Chandra’s Essel Group, to participate in the annual general meeting of Dish TV scheduled for later in the day and exercise its transaction and voting rights as a shareholder.
However, the AGM was postponed by a month after it emerged that creditor-shareholders of Dish TV may not be in favour of proposed resolutions that included seeking shareholders’ approval for adoption of annual accounts and appointment of Ashok Kurian as an independent director, people with knowledge of the matter said.
A majority of shareholders – representing 75% voting rights of those present at an AGM – have to vote in favour for a resolution to be approved.
Besides Yes Bank, other creditors that have invoked the share pledge of Dish TV include IndusInd Bank, L&T Finance, HDFC Ltd and Clix Capital, together holding nearly 20% stake. They may have voted against the resolution, the sources said.
Yes Bank had appealed at the Supreme Court after Allahabad High court dismissed its petition last Thursday to quash the FIR filed by Subhash Chandra with the crime branch of Uttar Pradesh.
‘BEYOND POLICE JURISDICTION’
The Supreme Court has also stayed criminal proceedings against Yes Bank by Gautam Buddha Nagar crime branch, saying its notice to freeze the transfer of shares and exercise of voting rights was beyond its jurisdiction. “This will lead to a lawless state… It is a misuse of power,” Justice D Y Chandrachud said.
A three-judge bench that included Justices A S Bopanna and Vikram Nath also sent notices to the state government and Essel Group .
The UP police had taken action against Yes Bank following a complaint by Subhash Chandra accusing Yes Bank’s former chief executive Rana Kapoor of fraud in brokering a merger between Videocon D2H and Dish TV. Kapoor is facing allegations of financial irregularities at the bank and is currently in jail.
Abhishek Manu Singhvi represented Yes Bank at the Supreme Court while Kapil Sibal represented Dish TV and Subhash Chandra.
It may be recalled that Ashok Kurian had resigned as an independent director of Zee Entertainment Enterprises Ltd last month after Invesco Developing Markets Fund and OFI Global China Fund LLC – with 17.8% holding in a media company – sought his and Manish Chokhani’s exit.
The voting on Dish TV resolutions had started on November 26 and ended Monday 5.00 pm, according to stock exchange disclosures.
The scrutinizer for Dish TV will not be obliged to disclose the outcome of the voting since the AGM was postponed, said one of the persons cited above.
As reported by ET, private credit lenders that often provide finance against pledge of shares were rattled that they will not be able to exercise their rights as lenders if a crime branch freezing Yes Bank’s stake in Dish TV sets a precedent.
Yes Bank had provided a Rs 5,270 crore loan to Essel group of companies between 2016 and 2018 against the pledge of Dish TV shares. These shares were invoked in June 2020 after the group missed payments to the lender.
