Dish TV 33rd AGM Inconclusive on Rights Issue

Not much that was actionable was cleared at the 33rd Annual General Meet of Dish TV. The controversial issue of the Rs.1,000 crore rights issue was not taken up at the 33rd AGM since the largest shareholder, Yes Bank, was not in sync on the subject.

The rights issue has, in a way, been the genesis of the problem at Dish TV. Earlier in the year, the Dish TV management under Jawahar Goel, had made a public announcement of the proposed Rs.1,000 crore rights issue to raise funds for the company. However, Yes Bank had objected to the rights issue on two grounds.

The first ground for the objection by Yes Bank was that the largest shareholder was not consulted or even taken into confidence on such an important matter. The second, and more relevant objection, was that the rights issue would dilute the equity of the company and impact valuations, which was already a major headwind for the company.

Yes Bank currently owns over 24.6% in Dish TV, but this stake came about due to conversion of loan into equity. After Dish TV had defaulted on a Rs.5,400 crore loan to Yes Bank, the loan was converted into equity, giving Yes Bank nearly a quarter of Dish TV.

Post the rights issue imbroglio, Yes Bank had asked the board of Dish TV to convene a special EGM to vote on the continuation of Jawahar Goel as the CEO of the company. Jawahar Goel, incidentally is the brother of Subhash Chandra of Zee, and the promoter family holds just about 5.93% in Dish TV compared to nearly 24.6% held by Yes Bank.

A test of strength on which sides the shareholders will vote was to be taken up at the 33rd AGM on 30-December where there was supposed to be a shareholders vote on the reappointment of Ashok Kurien to the board of Dish TV. Incidentally, Ashok Kurien was on the board of Zee Entertainment and in early September 2021, he had resigned from the Zee board along with Manish Chokhani, due to the Invesco imbroglio.

At the 33rd AGM, the issue of the Rs.1,000 crore rights issue was not taken up as Yes Bank had objected to the resolution. Hence it was not put to shareholders vote. However, the proposed reappointment of Ashok Kurien to the Dish TV board was taken up for vote, but the outcome of the vote will only be made public after the court order on the subject.

Regarding the vote on the re-appointment of Ashok Kurien, proxy firms were divided. SES and IIAS have asked shareholders to vote against the reappointment of Ashok Kurien while InGovern has asked shareholders to vote for the reappointment of Ashok Kurien to the board. It now remains to be seen what happens to the outcome of the rights issue.