Yes Bank transfers 24% Dish stake to JC Flowers

The move is part of the lender’s move to transfer bad loans worth ₹48,000 crore from its books to the asset reconstruction company under the proposed 15-85 structure. With the transfer of Dish’s shares, it will have more flexibility to proceed with the recovery process.

“The bank has constraints when it comes to recovering from a company. On the other hand, an ARC has the flexibility to look at different options, including taking over a company,” said a bank official aware of the matter, seeking anonymity.

After Essel Group founder Chandra failed to service loans of over ₹5,000 crore from Yes Bank, the private lender invoked Dish TV’s shares that were pledged with it.

As of 30 September, Yes Bank’s shareholding stands at 24.78%, while the promoters’ holding was at 4.04%.

The legal tussle between Dish and Subhash Chandra family for controlling Dish has seen many twists in the last 16 months.

Recently, Dish TV inducted three independent directors, including Sunil Gupta, Madan Mohanlal Verma as well as Gaurav Gupta, on its board even as it stayed the induction of the seven candidates proposed by Yes Bank, citing a lack of regulatory approval.

However, investors said all three directors run the risk of being voted out at the annual general meeting on 29 December.

Since the tussle began, Dish TV has tried to bring in at least four directors on its board, but the candidatures have been rejected by its shareholders led by Yes Bank.

Earlier this year, Dish TV chairman Jawahar Goel had to step down after investors rejected his continuation as the managing director of the company. Goel, along with chief executive Anil Dua and independent director Rajagopal Venkateish faced the ire of investors in June when the three resolutions on their appointment were rejected at the annual general meeting.

Separately, Yes Bank’s legal battle with Dish TV continued as it failed to secure approval from the National Company Law Tribunal for holding a special shareholders’ meeting for reconstituting the board.

An early resolution of the Yes Bank-Dish TV impasse will be in the interest of shareholders as Tata Play has filed documents with the market regulator, the Securities and Exchange Board of India (Sebi), expressing interest in going public. Tata Play, Airtel and Dish TV are the three largest satellite television providers in India.

Currently, Dish TV’s board has only two independent directors, Shankar Aggarwal and Rashmi Aggarwal (both unrelated) but falls short of the six directors stipulated for the proper functioning of the board under the Sebi regulations.

In fact, Dish’s failure to meet the minimum number of directors on its board has also resulted in a fine of ₹4.6 lakh against the company by both BSE and the National Stock Exchange in November.