Dish TV India faces unprecedented board crisis as shareholders reject independent directors

In an unprecedented move, shareholders of Dish TV India Ltd have rejected the candidature of its remaining four independent directors, leading to a temporary incapacitation of the company’s board. At the extraordinary general meeting (EGM) held on Friday, over 71% of shareholders voted against the appointment of Rajesh Sahni, Virender Tagra, Aanchal David, and Shankar Aggarwal, marking a rare instance for a listed company to find itself without a functional board.

Dish TV India, the country’s third-largest satellite television provider, disclosed the outcome of the EGM in a stock exchange filing. Subsequently, the company responded to the setback by appointing Sanjay Khanna as a non-executive independent director and Ravi Bhushan Puri as executive director. Both appointments were made on December 18, seemingly in anticipation of a possible disruption at the EGM.

However, these appointments raised eyebrows as they were made before obtaining the mandatory approval from the Ministry of Information and Broadcasting, which is a prerequisite for directors of all television broadcasters. Despite this, Dish TV managed to induct the two directors as the board’s strength fell below the statutory minimum requirement of three members.

This development follows a series of shake-ups within Dish TV, with a total of 13 directors ousted by shareholders since September 2021. The tumultuous period began when Yes Bank, then the largest investor, initiated a revolt against the company. Yes Bank, Dish TV’s former biggest shareholder, sought to reconstitute the company’s board as Essel Group founder Subhash Chandra, Dish TV’s majority shareholder, faced financial challenges.

In December 2022, Yes Bank transferred its shares to JC Flowers Asset Reconstruction Co., making it the largest shareholder with a 24.19% stake in Dish TV. The ongoing tussle highlights the underlying issues related to corporate governance and financial stability within the company.

Jawahar Goel, the managing director of Dish TV and brother of Subhash Chandra, was among the ousted directors. Shareholders have expressed displeasure with what they perceive as poor corporate governance, citing concerns about the company’s investments in its over-the-top (OTT) platform, Watcho, and the overall composition of the board.

Proxy advisory firm Institutional Investor Advisory Services (IiAS) recommended voting against the appointments at the EGM. The firm noted that while the appointments complied with statutory requirements, Dish TV had previously failed to address shareholders’ concerns, including requests to convene an EGM. Over the past 30 months, the company rejected at least two requests from shareholders to hold an EGM to replace some directors and appoint a fresh set of independent directors, citing various technical grounds.

The ongoing turmoil raises questions about the future direction of Dish TV and its ability to navigate through the challenges posed by shareholder dissatisfaction and financial instability. The company’s response to these concerns, along with its efforts to rebuild the board, will be closely monitored by investors and industry observers in the coming months.