Dish TV gains 13% after Yes Bank move to sack board

Mayur.Shetty@timesgroup.com

Mumbai: Shares of

Dish TV

were up nearly 13% on Tuesday after Yes Bank moved a shareholder proposal to overthrow the board, including the managing director and CEO

Jawahar Lal Goel

. The private lender, which acquired just below 26% in the company following debt resolution, served notice to remove five directors and proposed seven directors to be appointed in their place.

In June, the company’s board had approved the raising of funds through a rights issue of Rs 1,000 crore. The promoters of Dish TV had pledged their holding for credit facilities used by the

Essel Group

. With lenders revoking the pledge, the promoter stake in the firm had fallen to below 6%. Yes Bank’s notice comes ahead of the company’s annual general meeting on September 27. Shares of the company rose to a high of Rs 16 during intraday trade on Tuesday before closing at Rs 15.5, up 12.7% from the previous close of Rs 13.8.

Explaining the grounds for removal of the board, the bank said the directors approved a rights issue process despite pending objections raised with them time and again, solely to dilute the shareholding of the bank, which is the largest shareholder, and to prejudice its interest.

According to a Yes Bank notice to the exchange, banks and financial institutions hold around 45% stake in the company, but the board is acting at the behest of minority shareholders holding merely 6% of the shares. The bank also said that the board had completely sidelined its multiple requests to reconstitute the board.

The notice has been sent to the board under Section 169 of the

Companies Act

, which empowers shareholders to remove a director. The company secretary has informed the exchange that it is taking steps to get the candidatures of the proposed new directors cleared from the information & broadcasting ministry, as prior approval of the authority is required.

The other four directors sought to be removed are

Rashmi Aggarwal

, who is currently associated with IMT-Ghaziabad and is on the board of other Essel Group companies,

B D Narang

, former chairman of Oriental Bank of Commerce,

Shankar Aggarwal

, an IAS officer, and

Ashok Mathai Kurien

, an entrepreneur.

Yes Bank has informed the exchanges that it has made repeated requests to the board to induct

Akash Suri

and

Sanjay Nambiar

who are part of the company’s top management and experts in their respective field. The bank has again proposed their names with five other directors. These are Vijay Bhatt,

Haripriya Padmanabhan

,

Girish Paranjpe

,

N V Prabhutendulkar

and

Arvind Nachaya

.