Yes Bank, Dish TV’s largest shareholder with a 25.63% stake, suspects that all is not kosher on the company’s books, CNBC-TV18 learned from speaking to bank officials.
The battle for control of the board of directors of Dish TV, the country’s second-largest satellite TV service provider, may not be over anytime soon, with Yes Bank considering legal action against the company if it fails to get seats on the board, two people directly involved in the case told CNBC-TV18.
Yes Bank, the largest shareholder in Dish TV with a 25.63% stake, suspects that all is not kosher on the company’s books, CNBC-TV18 learned from speaking to bank officials.
The bank “strongly suspects” that certain investments made by Dish TV are of a “questionable” nature, and several related party transactions have not been disclosed.
“We are 25% shareholders (in Dish TV), why shouldn’t we be able to see their books? There are governance issues at Dish TV and also their related companies, and we won’t know unless there is a forensic audit, âsaid a senior Yes Bank official who did not wished to be cited.
On September 4, in its special notice, Yes Bank asked Dish TV to review and pass the resolution to remove five directors from the company’s board of directors. This includes the founder-promoter and director of Dish TV Ashok Mathai Kurien and Jawahar Lal Goel who is the managing director and chairman of the company. Rashmi Aggarwal, Bhagwan Das Narang and Shankar Agganval are the other directors that Yes Bank plans to remove at the 33rd annual general meeting scheduled for September 27, 2021.
The bank is also seeking to appoint seven directors to the board of directors of Dish TV. In the same special opinion of September 4, he said: â… to propose the appointment of Akash Suri as non-executive non-independent director, Sanjay Nambiar as non-executive non-independent director, Vijay Bhatt as as independent director, Haripriya Padmanabhan as director Independent director, Girish Paranjpe as independent director, Narayan Vasudeo Prabhutendulkar as independent director and Arvind Nachaya as independent director. “
âUnless we have a seat on the board and look at the company’s books, how will we know the extent of the problem? Asked a senior Yes Bank official.
If Yes Bank is successful in securing shareholder approval to reconstitute the board on September 27, it may be able to secure those seats. But if the resolution is not passed or put to a vote, the bank will take legal action to consolidate its position on the board of directors, people familiar with the matter said.
“We sent them letters asking them to explain some investments, but the management did not cooperate with us at all,” added another person.
When asked how much of Dish TV’s investments may be suspect, the above people said they wouldn’t be able to come up with a figure without a forensic audit, but the figure may be “significant.”
One of these investments was also reported by the company’s auditors. Walker Chandiok & Co. LLP, the auditor of Dish TV noted that the company’s investment in its OTT Watcho platform could not qualify as management did not perform any impairment assessment on the 1 378 crore rupees of investment made there in the past two years. .
The notes to the accounts disclosed by Dish TV for its financial results for the quarter ended March 31, 2021, read: âIn accordance with the business plan of investing in new age technologies, among others, Watcho la plate -form OTT, network equipment and customer local equipment (CPE), Dish Infra Services Private Limited, a wholly owned subsidiary, had made significant progress in increasing these new era technologies during l ‘last year. The subsidiary had contracted with aggregators for the content and related infrastructure and had recorded Rs. 55,200 lakes as intangible assets under development and Rs. 68,585 lakes as tied capital advances as of March 31, 2021 However, the process could not be completed on schedule due to the COVID-19 lockdown and restrictions imposed across the country during the year. The management of the subsidiary company is in the process of concluding all the investments planned for the near future. As further described in Note 10, management has concluded that no material adjustment is required in the carrying amount of intangible assets under development and related advances. (iii) Auditors’ comments on (i) or (II) above:
Refer to the above report, according to the subsidiary auditor, in the absence of such aforementioned impairment assessment, we are unable to comment on any adjustments, if any, that may be required to carrying amounts of these intangible assets under development and related advances.
mint first reported that Yes Bank had written two letters to the management of Dish TV, seeking an explanation for the Rs 1,378 crore of investments made in Watcho over the past two years. The report states that Dish TV invested 21.3% and 19.2% of its revenue in each of those years (FY20 and FY21), respectively, in a business in which no one outside of the business has visibility. This makes investors scowl.
However, Dish TV rejected the report. Responding to CNBC-TV18’s questions on this story, Dish TV said, âWe would like to say that this is all incorrect. And we would not like to add any comments on it.
When contacted about the story, Yes Bank Managing Director and CEO Prashant Kumar said, âWe will not be making any further comments beyond what we have already communicated to the company that is in. the public domain. “
(Edited by : Abhishek Jha)
First publication: STI