Dish TV To Disclose AGM Results, Orders SEBI

India's securities regulator has directed Dish TV India Ltd. to disclose the results of its annual general meeting, held on Dec. 30, within 24 hours.

The Securities and Exchange Board of India, in an order issued Mar. 7, has also ordered depositories to freeze the demat accounts of Dish TV's directors and compliance officer till the AGM outcome is published, and issued the company, its promoter and managing director Jawahar Goel, and the board of directors a show cause notice.

These directions have come by way of an ex parte interim order. The regulator has given Dish TV, Goel, the compliance officer and the board 14 days to respond to its initial conclusions.

The regulator's interim order emanates from a Dec. 31 complaint by Yes Bank Ltd., a shareholder in Dish TV, alleging that the direct-to-home service provider has wrongfully withheld the results of the AGM. Post which, IndusInd Bank Ltd. and other shareholders of the company approached SEBI with the same grievance.

In its interim order, the regulator has noted that Dish TV failed to follow or disclose SEBI's advisory, dated Jan. 17, directing it to publish the AGM results. On Feb. 9, the regulator yet again reminded Dish TV of its statutory obligation to disclose the results.

On both occasions, Dish TV argued that the issue of disclosure of AGM results is pending before the Bombay High Court. And that the regulator should wait for the outcome of the court proceedings.

But, SEBI cited the high court's Feb. 17 order which clarified the pendency of the AGM results issue will have no bearing on the regulator's disclosure requirement.

The AGM Battle

The battle over the disclosure of the AGM voting outcome is a part of a larger fight between Yes Bank and Dish TV, in which the lender-turned-shareholder had sought to reconstitute the company's board on governance concerns and also filed a mismanagement suit. Dish TV has fought back by repeatedly seeking to freeze Yes Bank's voting rights and dispute their ownership.

At the controversial AGM held in December, the company's shareholders voted on three resolutions:

• Adoption of annual audited financial statements.

• Re-appointment of Ashok Mathai Kurien, a director liable to retire by rotation. 

• Ratification of remuneration of cost auditors for financial year 2021- 22

Yes Bank has been opposed to Kurien's reappointment. He is viewed as close to the promoter group (Subhash Chandra and family) and was forced to step down from the board of Essel Group company Zee Entertainment Enterprises Ltd last year.

SEBI's Order Against Dish TV

Here are the key reasons which prompted the SEBI order:

Role Of Board Of Directors, Compliance Officer And Scrutinizer

Under SEBI's listing regulations, the board of directors is obligated to ensure the company makes necessary disclosures and complies with all the applicable statutory provisions, the regulator has stated.

Also, it was the duty of the compliance officer to advise the company properly to ensure compliance with the applicable provisions. However, under the garb of complying with a "non-existent order of the high court", Dish TV's compliance officer disregarded the listing regulations, the order noted.

The scrutinizer, SEBI said, is responsible to prepare the consolidated report on the AGM results and on the resolutions put to vote. However, he submitted the results before the high court in a sealed cover, in spite of no order to that effect.

Hence, there is serious default on the part of the board, the compliance officer and scrutinizer, the regulator said.

Violation of LODR guidelines

SEBI has noted that Dish TV has not disclosed the AGM results despite a delay of 68 days whereas the regulations grant companies two days.

Withholding voting outcomes leaves shareholders and prospective investors in the dark. "Compliance with applicable principles laid down in LODR Regulations is the foundation stone of good corporate governance," SEBI's order said. "Any deviation is a serious concern for the regulator too".

Basis this, the market watchdog has concluded that Dish TV has failed to act in accordance with SEBI's regulations and advisories.