YES BANK PUSHING FOR MANAGEMENT CHANGE IN DISH TV

MUMBAI: Yes Bank Ltd, the single-largest shareholder in Dish TV, is pushing for a promoter change in the satellite-tv provider, alleging that the board is not acting in line with good corporate governance standards.

Yes Bank believes that only with a new owner at the helm can banks recover the bulk of the ₹6,500 crore borrowed by Subhash Chandra, two people said, declining to be named.

Dish TV on Monday shared with BSE a 28-page letter from Yes Bank, which alleged that the company has proceeded with a plan to raise ₹1,000 crore through a rights issue, despite objections by the bank. The board of Dish TV had in February approved the proposed rights issue.

“The basic question as to why Dish TV is going for a rights issue remains unanswered,” said one of the two people, a Yes Bank executive.

“It is a zero-debt company and generates ₹2,500 crore in Ebitda every year. The only reason why the company is going for a rights issue is that 94% of shareholders (public) will not subscribe as they have only seen wealth erosion in the past two years. This way, the promoters will be the only group which will participate in the rights issue, and this will help them increase their stake even as the ownership of other large shareholders will come down,” the person said.

“What Yes Bank wants is that the company should now be managed by a new management team, who can bring in a strategic investor because we as a bank don’t have any expertise in running this business. Once a new owner is in, we can look to pare our stake and get the best price,” the second person said.

Yes Bank, in its letter, also offered suggestions for Dish TV, including reconstituting five of the six-member board and inducting two nominee directors and four independent directors when the company holds its annual general meeting on September 27.