Dispute between Dish TV and Yes Bank escalates over corporate governance, fundraising plans

A dispute between Jawahar Goel, promoter of the Indian direct-to-home (DTH) service , and over corporate governance and fundraising plans appears to be escalating as both sides have dug in their heels.

Yes Bank is seeking to dissolve the entire board and removal of the promoter family, as the bank is said to be of the view that the board is “functioning in cahoots” with the minority shareholders (that is the promoters), who “should not have representation” on the board, sources close to the bank said.

Yes Bank had sent a notice on September 3 for the removal as well as appointment of certain directors on the board of the company.

On Thursday, the bank called for an extraordinary general meeting of the Dish TV shareholders seeking removal of Goel, chairman and MD as well as other existing directors from the board and induction of 7 new directors.

“Yes Bank is well within its rights,” said an official close to the lender. “It should be a professionally-run board. As the largest shareholder, we have the right to dissolve board and instate a new professional board. The new board members should have requisite experience in the area and the promoter family should no longer exercise any control on the board or the company.”


The official also stated that a forensic audit should also be conducted on Dish TV as Yes Bank fears that several related party transactions have not been revealed, which could burn a hole in Dish TVs books.

Officials close to the private lender say that as the largest shareholder, it has the right to dissolve the existing board and place it with a professional one.

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But people close to the company are raising questions on the lenders’ course of action and also whether it’s acting as a shareholder or a lender.

A financial investor close to the promoter family said that Yes Bank has been a lender to Dish TV for more than a decade and has always derived comfort on the business operations and financials from the existing management of Dish TV.

“All loans availed by Dish TV from Yes Bank have been repaid in full. However, now Yes Bank is acting in the capacity of shareholder (by virtue of acquiring shares through invocation of certain pledged shares). Dish TV has never been privy to any such borrowing arrangements and neither Yes Bank informed or took prior permission of Dish before granting such loans to borrower entities,” the investor said.

Email queries sent to Dish TV and Yes Bank remained unanswered till press time.

Earlier this week, Dish TV sought an extension of time for holding the annual general meeting of the company that was scheduled to be held on September 27.

“They (Dish TV) are trying to stall to make sure dubious investments don’t come out to the fore. We haven’t been able to access the books of accounts, nor our queries on several related party transactions been answered, these are all stalling tactics,” the official close to the development said.

However, a person close to Dish TV said that Yes Bank is trying to “derail” the ₹1,000-crore rights issue, as it will dilute the bank’s holding.

“The board of Dish TV had observed that in order to support the expansion of business and meet working capital requirements of the company, and also in view of the requirement to pay the licence fee, it was imperative to raise funds,” the person said.

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Incidentally, Dish TV has been trying to raise funds through debt. However, due to low credit rating among other factors, it has not received any positive response from any of the banks.

Also, Dish TV has been witnessing 20-24% annual churn in subscribers, and accordingly, needs to acquire set-top-boxes (STBs) to compensate for the churn by acquiring new customers.

“Since majority of the cash flows of the company have been deployed towards debt reduction (to the tune of ₹2,800 crore in last three years), the company has not been able to spend adequate funds for acquiring new customers, either on STBs or on marketing and promotions, which has resulted in loss of market share,” said the person close to the company. Analysts feel that given the business projections and disruption caused by Covid-19 and OTT players, it is evident that Dish TV will be in need of additional funds to operate the business.

“Equal rights is available to all large and small shareholders of in proportion to their existing shareholding; now Yes Bank has to figure out if they want to act as shareholder or a lender,” the person close to the company said.



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