The Annual General Meeting (AGM) of Dish TV scheduled on December 30 could be testing for the company with institutional advisory firms — Stakeholders Empowerment Services (SES) and Institutional Investor Advisory Services (IiAS) — asking shareholders to vote against the reappointment of Ashok Kurien to the company’s board. But proxy advisory firm InGovern, has taken an opposite view asking shareholders to vote with Dish TV’s AGM proposals.
The Dish TV board has proposed three resolutions — adoption of standalone and consolidated accounts for the financial year which ended on March 31 2021; the re-appointment of non-executive and non-independent director Ashok Kurien; and ratifying the remuneration of cost auditors.
YES Bank to vote against
Dish TV’s largest shareholder YES Bank is against the reappointment of Ashok Kurien.
“Ashok Mathai Kurien has been a member of the audit committee since May 2018, and to this extent, accountable for the FY20 and FY21 audit qualifications, and the FY21 material weaknesses in internal financial controls raised by the auditors. We note that YES Bank Limited, holding 24.8 per cent equity stake in the company, does not support his continuation and is seeking his removal from the board, through the requisition of an EGM.” noted IiAS in its report.
Noting the weaknesses of internal financial controls raised by the auditors on the company’s FY21 financials, IiAS has also recommended against the adoption of the financial accounts for FY21.
SES, on the other hand, is more measured in its agreement with YES Bank’s dispute with the promoters.
“At the outset, SES agrees that at Dish TV, there are serious governance issues and those responsible for the same must be penalised. However, there is a difference between penalising wrongdoers and penalising the company itself. The Special Notices given by YES Bank and suggested resolutions for approval of shareholders if acted positively, would leave the company in a serious problem, without any board, non-compliant in many respects and may end up in consequences not envisaged by YES Bank,” SES said in its report.
“Even though SES would want to see a change in board, yet it is constrained as neither the resolutions are legally tenable nor are they in the interest of company unless a solution to vacuum in Board is found,” SES added.
SES believes that the lack of timely oversight and late action on the YES Bank’s part is what has landed Dish TV in the mess that it is today, therefore the private lender is not entirely blameless.
Siding with management
On all these three resolutions, InGovern is siding with the management’s recommendations, thus advising shareholders to vote “for” these three resolutions.
“The statutory auditors have issued a qualified opinion on the standalone and the consolidated financial statements…” said InGovern, concluding that “there are no new adverse qualifications in FY2020-21.”
Therefore, InGovern’s recommendation is: “Considering no new adverse audit qualifications, we recommend shareholders vote FOR the proposal.”
Also finding no concerns with the management’s other two proposals, InGovern has recommended shareholders to vote for those proposals as well.
The much delayed AGM is another shareholder conflict in which Dish TV promoters Essel Group have embroiled themselves. The AGM was delayed from its previous date in September after YES Bank, which holds 24.78 per cent of Dish’s shares, called for the removal of the entire Dish TV board of directors. In the past few months, a legal battle has ensued between Dish TV promoters and YES Bank in which Dish promoters have tried to take YES Bank’s right to vote in the AGM away. However, as of Friday, based on the Bombay High Court as well at the National Company Law Tribunal, YES Bank has been allowed to vote in the AGM. The Hindu BusinessLine