Thursday, May 19, 2022

Non-Adoption of Accounts| Dish TV – Practical case| Companies Act Vs SEBI Vs Contract Act

Hello buddies very good evening guys we study uh company law we study sevi we study various meeting provisions in company law and we study so many laws but only when certain practical things come into the four we understand the importance of studying everything together right .

So because of our good luck i bring to you today you know linking between companies act sebi and other provisions to help you understand that what exactly goes on in the practical world you might have heard .

About you know dish tv recently just two three days ago so i thought i'll make a quick video on the history of everything it's just a very short video which will make you understand everything as you know as per sebi lodr regulations you need to file every listed company has to file certain documents and of course when the .

Agm is held you should immediately send the results etc within two working days you know that you would have heard and also sebi uh if any of the companies don't do that sebi have tremendous powers in my class i've always told you sebi has powers to issue directions as they deem fit so how is the practical applicability of that and also under .

Section 102 you would have seen there are four things that happen at the agent agm adoption of accounts that is consideration of accounts leading to adoption appointment of auditor appointment of director that is rotation and lastly declaration of dividend so guys i bring to you the distribu versus yes bank case uh very quickly to help .

You understand all these provisions in a practical scenario that is where a law student will definitely understand how things are done practically if you keep reading stuff let's do so yes bank is the largest shareholder of the company owning 25 24.78 of dishtv shares okay 24.78 .

Then you have indus in bank around three to four percent now how did yes bank actually manage to acquire 24.78 percent that is what you need to know you would have just heard the news about this tv but you need to delve deep into the history to understand the entire thing the bank had acquired the shares after uh certain sl group entities the entire .

Group companies called sl group managed by mr subash chandra defaulted on a loan of 5270 crore crazy as security for these said loans no generally i gave a loan of 5000 to 70 crores bank there was a pledge you know pledge again you would have studied in ca foundation and ca enter how important .

These concepts are guys today will come to know so a pledge of almost around 47 19 13 990 shares of the company amounting to around 25.63 percent of the total outstanding of the company to yes bank there was a pledge it was created in favor of ybl s bank limited by security trustees of course when you make a pledge .

It is just what it's a bailment it is just handing over the position not the ownership there were security trustees who were handing the position and who were they they are called catalyst trusteeship services limited and idbi trusteeship services limited they are security trustees on behalf of whom yes .

Bank limited the borrower was whom of course sl group entities of course which included dishtv now my dear friends what happened of course there was a default of 5270 crore in the payment of borrowers and then the security trustees these two people that is the catalyst trusteeship services limited and idb at assessive services .

Limited what do they do that invoke the pledge once you invoke the pledge what can happen guys you can sell off the shares and of course you can recover the money in this what happened due to the agreement the steps were taken up by the security trustees and then that those shares now which are pledged against the .

Loan of 5270 crore it was supposed to be transferred in their own name that is catalyst trustee ship services limited and idbi trusted server is limited or as per the agreement it was supposed to go in the name of ybl that is yes bank limited accordingly since it was there in the contract it was now transferred to whom .

Yes bank limited so yes bank limited became owners of that whatever percentage twenty four point seven eight percent of shares of dishtv now distribu went to high court because they felt that the ownership of that share should not go to ybl they should sell the share somewhere and there should be a proper agreement and they .

Should follow the contract so there was a contractual problem so every contractual problem you can go to the courts so it went to the court and it eventually went to the high court in the high court they brought about a stay order so dishtv went to the high court to ask for a stay order against whom restricting yes bank limited from .

Voting at the agm when was it supposed to have to be held december 30 2021 guys again agm provision section 96 will come into the four when should an agm be held within six months from the end of the financial year so it was supposed to be held in august 2021 and it got postponed again it was supposed to be held in .

September or something got postponed then it went to december again there is a violation of companies act because you cannot keep on extending like this again and again extension will only be granted against very serious issues like for example covet in 2020 the roc had granted extension for all .

Companies to hold the agm by 31st december 2020 but this is 2021 covet is gone so this had happened since it was matter was in the high court they kept on postponing it but nevertheless this tv went and told yes bank is not the owner of shares they cannot vote at the agm very simple 30th .

September 30th december sorry 2021 high court rejected this petition on december 23rd 2021 they said nothing doing the agreement seems to be clear and they should be the owners of the bloodshares now to give a bit of history the battle between dis tv promoters and yes bank started way back on september 7th last .

Year when yes bank called for the removal so the moment they what do you say got the shares right 25 point whatever shares immediately they called for an egm they called for an egm to throw out all the directors under section 169 again guys i am linking all the companies act sections section 169 red with section 100 requisitioning and .

Egm who is requisitioning here remember section 100 who can requisition any shareholder with one tenth of the share capital that is ten percent of the share capital can requisition an egm so yes bank by invoking section 100 since they had 25 odd percentage obviously minimum required is 10 percent called an .

Extraordinary general meeting for the removal of all the directors including the promoter director jawahar through an extraordinary general meeting now the thing is they said when you are not even a shareholder the share should never have come to you how dare you raise a egm request so that .

Matter went to i-code again fighting there in the high court right the agm till today has not been held only imagine right this litigation now has gone up to the supreme court also based on the question of law what is the lawyer should the .

Shares be owned by yes bank was the question so in one of the cases there are so many cases going on in one of the cases the supreme court has told that whatever the case may be i need to restore the voting rights to ibl because the contract seems to be very clear though you have raised the question of law .

The contract seems to be clear and the voting right should go to what yes bank limited that is a supreme court case regarding the ownership going on separately and now i have also a high court restrained order has come saying that until the matter will be decided by all the quotes put together you will not exercise your voting power .

Where in the agm when is the agm december 30th 2021 first of all there is a violation of companies act there in agm provisions right moving on company had also informed that it has moved a suitable application in order to place the voting rights in a sealed cover before the honorable bombay high court since bombay high court was .

Hearing this particular case they said sir agm will happen don't worry but ybl's ownership i don't know but never the lesser it i will put it in a sealed envelope and give it to you what they'll give results of the agm okay now ybl filed its complaint dated december 31st 2021 agm had happened agm results they knew .

But the company was not ready to file the results guys every listed company as per sebi regulation number 42 lodr regulations have to mandatorily file the results of the agm within two working days of the agm where agm happened on december 31st two working days january 1st january 2nd so .

By january 2nd you should have given the results to sebi it is a mandatory filing requirement for all listed companies we started with ca inter we started with ca foundation we started ca foundation concept of pledge now we also saw ca inter found uh you know concept of section 96 agm and can .

You what do you say postpone the agm adjourn the agm third point sebi regulation ca final within two working days we also saw ca final uh two other sections segment ca inter and final both section hundred requisitioning and egm and removal of director are you understanding guys .

Next now seven regulation within two working days you have to do they didn't do so yes bank limited lodge the complaint with sebi sebi understood all these things and released the first warning that is called the first advisory when that is 17 january 22 .

17 january 29 23 obviously 22. they said there was no direction whatsoever from the honorable high court not to publish the voting results they said boss case was going on there i agree but they never told not to publish the results where are they told in the order they have rejected the petition but they never told you not to disclose the .

Results why aren't you disclosing the results please disclose to everybody it's a public company listed company what are you doing the company is therefore advised to disclose the voting results or outcome of the agm held on december 30th clearly mentioning the directions of the high court immediately you do it when did .

They tell january 17 2022 now this tv replied to sebi telling that sir sorry sir case is going in the court of law i will not do it it is sub judy c it is sub judy c i will not sub judici means case is going on i will not disclose so we got to know it .

Sebi sent one more advisory final warning february 9 2022 final advisory sebby once again reminded the company about its statutory obligation towards shareholders and other stakeholders and failure to act in compliance with the regulations they sent a letter saying that please disclose the results which were declared .

On december 30th 2021 when they said the final warning boss if you don't do it i shall take appropriate action against the company dishtv said sub judy c case going on i am not going to disclose so guys in one of the most landmark orders right sebi what did they see they opened .

A high court order to understand whether high court has told in any line just again to read they said whether in any line they have told do not disclose do not disclose if i call tested ok i may agree now when you read the high court decision there also it has clearly said dependency of the above interim .

Applications have no bearing on the requirement by sebi clearly they have given there sebi is always in addition to companies act in addition to other laws but not in derogation of so nowhere it says that you cannot do it why aren't you doing it boss sebi declaration result declare you declare .

The results no this tv said no sir if i declare a result problem will happen share price will reduce they are giving some nonsense reasons then beautiful it is one of the generally i always used to tell in the class they can .

Give such directions as they deem fit dangerous it was i had given you other examples but this is the best example that i can think of to make you understand what do you mean by such directions as they deem fit by the powers vested in the 111411b1 of the sebi act the order was passed when was it passed guys i'll show .

You the order the order was you know pass this i read the full order now march 7 2022 just a few days back by sk monty was a whole time member of sebi right so obviously this is just the gist of the story i have read all the material there i took almost one hour to read everything and made a gist of it that is .

Enough for you right so what does it say they said first one compliance officer mr ranjit singh he is the compliance officer company secretary of dishtv shall immediately immediately know march 7 within 24 hours you have to disclose the results i am directing you that's it and board of directors should ensure .

That there is strict adherence to this provision second depositories shall immediately upon the reset of this order guys deadly freeze the dmat account of all the directors freeze the dmat account of complaint one share also they will not buy from any other company freeze it .

And till the time the voting results are declared freeze the damping freeze the demand accounts it is one of the most deadliest orders ever passed as practical example then they also told they have given some five six pages i was reading about how they should be a culture of compliance .

How you should maintain high ethical standards how individual directors are required to perform their duties due diligence care dignity honesty indirectly they are telling the directors of distribute bro what are you doing you have to ensure that the public company people should know the real deal .

What is happening what are you doing so guys then the results are declared crazy results are declared i'll show you see if you see that adoption of accounts as regards adoption of account checkout what is the percentage 78 percent 78 percent what against the resolution 78 percent .

Against the resolution regarding adoption of accounts in that public non-institution 73 percent public institutions 98 percent so basically 98 73 all put together overall vote 78 of the votes result declaration gone next reappointment of ashok mataya korean .

Director liable to retire rotation 79 percent said no i'm not going to do it 79 percent you saw the results then ratification and remuneration of cost auditors 53 percent said i don't want that cost auditor let them get out so three things were there all three they lost my dear friends all three lost .

What is the scene now so they declared it a couple of days ago only what is the scene now the board of dishtv has proposed the appointment of raj gopal chakravarthi venkatesha as a nominee director on the board days after shareholders voted against a reappointment of ashok kurian so they now have come up with the .

Nominee director concept and they have appealed to securities appellate terminal against the interim order of sebi as of today march 13th when i am recording this video these two things have happened so you have understood inter you have understood foundation you understood sebi there are four things that happen at the .

Agm adoption of accounts is very important if it is unadopted you will have to adopt the provisional accounts later it will be adjourned at the adjacent adopt but in this case we'll have to see what will happen guys very very interesting case one more case which i .

Used to show in class if you remember is uh of course the jet airways case this was in june 17 2021 jet terrace is also one of the cases where the shareholders refuse to adopt the annual accounts in this case they have not given a reason as to why they have simply told cases are going on that's why here jet airways case lot of ibc .

Case pmla case against this the promoter and of course your what do you say a lot of loan defaults are happening that is why they failed to adopt the account so if you see your my dear friend jet airways is this this they did not play around they immediately declared .

The results see 94 percent i have shown this in class 94 percent have voted against option this was in this was the first example of non-adoption of accounts june 17 2021 and whereas appointment of audit i mean auditors as such they have said okay appointment of auditors okay no problem .

I approve but the accounts itself i'm not going to adopt because there are lot of frauds going on i did not get a true and fair view of the books of accounts so guys this is the scene with respect to jet airways and this is the most recent example of dish tv so we have learned through this .

The concept of pledge of shares how it works its trading ca foundation etc and ca enter concept of section 96 and section 100 96 is agm 100 is egm who can request an agm ca final of section 169 removal of directors and of course sebi regulations we have seen and sebi sections 11 11 4 with specific thrust on .

Such directions as it may deem fit so for every aggrieved order i can go to whom i can go to sat so its pending in sat as of today so this my dear friends this is how you need to read this is how you need to study concepts will study everywhere but you need to study it together and this is how you need to decode the brack and decode the law okay .

I want to share this with you hope you enjoy thank you so much cheers

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