What’s the fight between Zee’s Subash Chandra and YES Bank over Dish TV?

For the past several months Zee Entertainment’s Subhash Chandra and YES Bank have tended to remain in the news, for the right or the wrong reasons. 

Barely months after the controversy around the Zee Entertainment-Sony India deal and the concerns raised by Zee’s minority investor Invesco over the continuation of Punit Goenka as the CEO, Chandra is in the news as the Supreme Court has stayed a first information report (FIR) he had filed with the Uttar Pradesh police against YES Bank.

What was the FIR all about?

Chandra first filed an FIR against YES Bank at Greater Noida in September 2020 and initiated civil proceedings against the bank at Delhi’s Saket District Court for invocation of shares. The Saket court initially restrained YES Bank from selling the shares but withdrew the proceedings in August 2021.

In the FIR, Chandra had asked the Uttar Pradesh police to freeze the voting rights of YES Bank’s stake in cable provider Dish TV India. YES Bank holds a 25.6% stake in Dish TV, which is operated by Chandra’s Essel Group, which is also the promoter of Zee. 

The FIR came even as Dish TV said last night that it had postponed its board meeting by a month. 

So, what did the Supreme Court actually say?

According to a report by Business Standard, the apex court said that the police had frozen YES Bank's voting rights, which even company law tribunals had not done. This will only lead to lawlessness in the country, the report cited the court as having said. 

The court said the freeze on voting rights amounted to short-circuiting of judicial orders by using the police. “We can't allow this. Using the criminal law process to achieve results in civil proceedings will be dangerous. We have to look at the overall consequence," the court said, as per the news report cited above. 

But what is the whole issue all about?

YES Bank had acquired a 24.5% stake in Dish TV after its promoters failed to repay their debt and banks invoked the pledged shares. In September last year, Chandra filed a police complaint against the bank and its former management led by Rana Kapoor accusing them of fraud while brokering a merger transaction between Videocon D2H and Dish TV India. The whole matter is now under investigation by the police.

YES Bank, which is now controlled by the State Bank of India, moved the highest court after the Allahabad High Court dismissed its petition on Thursday to quash the FIR filed by Chandra with the Uttar Pradesh police.

What has the police done so far?

The crime branch of the Gautam Buddha Nagar police had frozen the voting rights on the stake held by YES Bank in Dish TV.

What does YES Bank want? 

YES Bank wants to replace the current board of Dish TV with its own nominees as the lender is of the opinion that the board is siding with the Chandra family – whose stake in the company has decreased to 6%.

YES Bank on September 3 had suggested reconstitution of Dish TV’s board and opposed the proposed rights issue as it would dilute its holding in the company, according to a report by The Economic Times.

How much money had YES Bank actually loaned to the Essel Group?

According to The Economic Times, YES Bank had provided a Rs 5,270 crore loan to Essel group of companies against the pledge of Dish TV shares in 2016. After the group companies of Essel started defaulting, YES Bank invoked the shares in June 2020 and recalled the loan the following month.

Who are the other lenders, apart from YES Bank, that are also owed money?

The other lenders who have also invoked their share pledges include IndusInd Bank, L&T Finance, housing finance company HDFC Ltd and Clix Capital.