On Monday, Dish TV disclosed that it had agreed to write down off 203 crore invested in Watcho even because it moreover acknowledged 2,334.57 crore in impairment-led losses as regards to the Videocon D2H merger in 2016.
These twin impairment expenses pushed Dish TV to put up 1,919.7 crore losses through the January-March interval as in opposition to 80.21 revenue within the October-December quarter.
Mint first reported how Dish TV’s 1,378 crore investments in Watcho within the monetary years 2020 and 2021 had grow to be a sticking level with Sure Financial institution, within the version dated 15 September.
A choice to write down off its investments, based on two executives aware about the developments, is as a result of Dish TV wants shareholders to approve its monetary statements, absent of adversarial remarks by the auditor, after traders in December had rejected the decision.
“Shareholders had rejected from approving Dish TV’s monetary report because the auditor had made qualifying remarks on the investments in Watcho and likewise as a result of it had not executed the necessary impairment check as regards to the Videocon D2H enterprise,” mentioned an investor, who owns greater than 1% shares of Dish TV. “Now the auditor has not made any qualifying remarks after the corporate determined to write down off these investments. So Dish TV needs to get its financials accredited by the shareholders within the AGM (Annual Normal Assembly)”
However earlier than the AGM, a much bigger check lies forward of the Board, led by chairman and managing director Jawahar Goel.
Shareholders of Dish TV will vote in a rare basic assembly on 24 June to re-appoint Goel as managing director, Anil Dua as director and to nominate Rajagopal Venkateish as an unbiased director.
Dish TV bought a stinging rebuke the final time it sought shareholder nod for the re-appointment of director Ashok Kurien in December final 12 months with 79% of traders rejecting his candidature.
Kurien resigned, leaving the corporate with 5 administrators on its board.
“This resolution to write-off investments in Watcho, which is the primary (because it was arrange in 2019), simply reaffirms our place that there isn’t any transparency in how this cash was getting used to provide unique content material,” mentioned an government at Sure Financial institution. “We stay assured that the majority shareholders will once more vote in opposition to the three director reappointments”
An electronic mail despatched to Sure Financial institution looking for remark went unanswered.
Goel is the youthful brother of Essel group founder Subhash Chandra, and owns 5.93% of Dish TV.
Chandra on Tuesday filed his nomination from Rajasthan for the elections to Rajya Sabha, the Higher Home of Parliament as an unbiased backed by the BJP.
Previously, Dish TV’s statutory auditor, Walker Chandiok & Co. LLP, the Indian affiliate of audit agency Grant Thornton LLP, had cited its incapacity to stamp its approval on investments in Watcho and on the standard of belongings purchased from Videocon D2H.
An adversarial comment by the auditor made Sure Financial institution, which owns 25.63% of Dish TV, query if the corporate was being run effectively.
Not satisfied with Dish TV’s response, Sure Financial institution took an activist investor strategy when it first despatched a letter to Dish TV in September final 12 months, demanding reconstitution of the board. Sure Financial institution wished to take away 5 of the six administrators, together with chairman Goel, and sought the induction of seven members.
Dish TV, which denies these of lack of company governance, argued that Sure Financial institution is trying to take management of the corporate. After Dish TV rejected the lender’s demand, Sure Financial institution known as for a rare basic assembly. Dish TV rejected this demand too. Subsequently, each Sure Financial institution and Dish TV have sought courts to adjudicate.
“As per the relevant accounting normal, the impairment testing of the intangibles is undertaken as soon as yearly,” mentioned a spokesperson for Dish TV. “Accordingly, the mentioned train was carried out for FY 21-22 for which advise from unbiased valuers have been additionally obtained “
Dish TV didn’t touch upon why it agreed to write down off a few of its investments in Watcho.
The corporate denied that it had agreed to acknowledge impairment-related expenses because it wants shareholder approval for the adoption of the monetary statements, with none adversarial auditor remarks, for the 12 months ended March 2021.