Dish TV & lenders engage in new legal battle on board recast

Lenders, who own a majority stake in the company, have called for removal of the existing two-member board of S Aggarwal and Rashmi Aggarwal

Dish TV India, a satellite TV broadcaster, and its lenders are engaged in a new legal dispute.

The company’s board of directors recently endorsed the names of two new directors while deferring action on the three candidates suggested by the lenders.

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The current two-member board, made up of S Aggarwal and Rashmi Aggarwal, has been called for to be removed by lenders, who hold the bulk of the company’s stock. They cited corporate governance failures, according to banking sources, although the board has not yet made a decision.

Lenders have informed the board twice that the majority of stakeholders no longer trust the current board. According to the filings made with the stock exchanges, they are not acting in the interests of the stakeholders, which is why.

“After receiving the lenders’ communication, the board, instead of resigning, recommended two more names to the board while not taking any decision on the three names sent by lenders. All the shareholders are suffering as share prices are falling and losses are rising,” said a banking source.

The company reported a loss of Rs. 2,029 crore for FY23 while earning Rs. 1,110 crore in revenue.

There was no response to an email submitted to Dish TV India. On the BSE on Tuesday, shares of Dish TV ended unchanged at Rs. 18.14.

After promoter businesses failed on loans and banks confiscated the pledged shares, the Subhash Chandra family, which currently owns less than 4% of the business, lost its shares in Dish TV.

On June 1, Dish TV India reported that the requisition notifications submitted by lenders were deemed unlawful since four shareholder-issued notices were missing. Seven notices have been submitted twice, but the originals have not been supplied.

The boards, governing bodies, or other entities of 11 entities—companies, trusts, and partnerships—have not submitted any authorization with their notices. According to Section 100 of the 2013 Companies Act, such people were not permitted to hold an extraordinary general meeting or send notices, the business claimed.

With a Rs. 5,000 crore exposure to Dish TV India, YES Bank had the biggest exposure among the lenders. Currently, the bank owns about 25% of the business.

The loan to Dish TV has been moved to a joint venture with JC Flowers, along with its bad loan portfolio totaling Rs. 20,000 crore.