Dish TV’s Minority Investors Association has alleged a breach in corporate governance by the company, for failing to disclose the Ministry of Information & Broadcasting's (MIB) letter approving director nominations on its board to the exchanges, a letter accessed by CNBC-TV18 showed.

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The Minority Investors Association has addressed a letter dated March 1, 2023 to the board of directors of Dish TV, and also sent a copy to the capital markets regulator SEBI, stock exchanges and various creditors and stakeholders. CNBC-TV18 has accessed this letter.

Denying the allegations made in the investors' letter, Dish TV said that the current composition of the board was in line with the requirements of SEBI Listing regulations. "As regards the content of the communication of Minority Investors Association, at the outset it is submitted that all the allegations made out in the letter are wrong, malicious, incorrect, and baseless and hence are denied. It is submitted that the Company is in compliance with all

the applicable regulations of SEBI including Regulation 30 of SEBI Listing Regulations. As submitted above, the NSE has advised the Company to provide its response by or before March 6, 2023, which response shall be submitted accordingly," it added.

The minority shareholders in the letter have stated that they obtained information through a Right to Information (RTI) request. The RTI revealed that the Ministry of Information and Broadcasting (MIB) has approved the list of directors submitted by Dish TV for appointment to the company's board, as per their letter dated December 26, 2022.

“We believe that the board of directors has committed a serious breach of corporate governance by (1) Failing to disclose the MIB's permission or letter to the stock exchanges. Although Dish TV had informed the stock exchanges about the request for approval from MIB on August 3 and 30, the board has not notified the exchanges about the approval received from the ministry, and 2) Delaying the appointment of directors approved by MIB,” the shareholders alleged in this letter.

“These breaches are especially serious given that Dish TV's directors and officers have previously been reprimanded and fined by SEBI and the stock exchanges for multiple violations of corporate governance and listing requirements. In one instance, the independent directors of Dish TV claimed that it was not informed by the management of the company about communication from SEBI to the board. However, this excuse cannot be used again, and we are shocked that the board has taken no action to address the matter,” the letter said.

The letter comes days before Dish TV’s extraordinary general meeting (EGM) on March 3, 2023, where it will seek shareholders approval to nominate four independent directors to its board, including Sunil Kumar Gupta, Madan Mohanlal Verma, Gaurav Gupta, and Lal Behari Singhal.

As per Yes Bank sources, this does not include any of the independent directors’ names that were proposed by the bank, and also approved by the MIB.

Yes Bank holds 24 percent stake in Dish TV, which it has now transferred to the JC Flowers Asset Reconstruction Company, as part of the overall Rs 48,000 crores of loans transferred to the ARC under a deal late last year.

According to people directly involved in the matter, the Ministry of Information and Broadcasting (MIB) approved six names for appointment to the board of Dish TV on December 26, 2022, as proposed between Dish TV and Yes Bank.

These six names include three names proposed by Yes Bank, namely Arvind Nachaya Mapangada, Girish S Paranjpe, and Haripriya Padmanabhan. The other three names approved by MIB proposed by Dish TV include Madan Mohanlal Verma, Uday Kumar Verma, and Sunil Gupta, as per people in the know.

However, for the March 3 EGM, Dish TV has included four names, including two which have not been approved by MIB, as per Yes Bank sources. Dish TV has sought shareholder nod for Sunil Gupta, Madan M Verma’s nomination as independent directors on the board, which were approved by MIB, and additionally proposed Gaurav Gupta and Lal Behari Singhal’s nomination, which have not been approved by MIB. None of the names proposed by Yes Bank have been considered, said a person in the know.

The minority shareholders in their letter to the board have now demanded that the company convene a board meeting and appoint the MIB approved directors and hold the management accountable for not reporting official communication to the board, to protect the rights of all stakeholders, especially minority investors.

CNBC-TV18 has reached out to Dish TV for a response on these allegations. Their response is awaited.

(Edited by : Hormaz Fatakia)

First Published:Mar 1, 2023 1:08 PM IST