The Bombay high court (HC) on Monday rejected an interim plea by Dish TV India Ltd promoter entity World Crest Advisors, seeking to prevent Yes Bank Ltd and JC Flowers Asset Reconstruction Pvt. Ltd from transferring or encumbering Dish TV shares.
“In light of prima facie finding, that JC Flowers, presently registered as beneficial owner, is having all the rights, benefits and liabilities attached to the securities held by depository and including voting rights, as well as the prima facie finding that no case of fraud has been established by the plaintiff, the interim relief sought for in the present application cannot be granted,” said a bench led by Justice R.I. Chagla.
World Crest, which has a 0.05% stake (950,000 shares) in Dish TV, had filed a plea before the court seeking ownership of over 440 million shares of Dish TV.
Yes Bank, however, asserted that these shares were pledged as collateral to Catalyst Trusteeship, a security trustee, by five firms, including World Crest, to secure term loans. At present, Yes Bank, through JC Flowers, holds a 24.19% stake in Dish TV. Yes Bank also said it was the rightful owner of the shares and sought to exercise associated rights. In its lawsuit, World Crest alleged that Catalyst colluded with the lender, facilitating the transfer of shares to itself and subsequently to the bank.
However, Yes Bank argued that it held the shares by virtue of loans taken by certain other promoters, for which Catalyst served as a security trustee. It said that as the loans were not repaid, the shares were transferred to the bank.
In its plea, World Crest also alleged fraud by Yes Bank, citing reports from investigating authorities. However, the HC said World Crest had failed to provide substantial evidences in support of its claims, instead relying on the complaints filed with investigating authorities, affidavits from authorities and letters issued by them to support its case alleging fraud.
“A final report of an investigation officer is a mere opinion on material collected by him, and the truth of the offence can only be decided by a court. I am of the view that the plaintiff failed to establish a prima facie case of fraud,” the court said.
Earlier, too, the Supreme Court had granted protection to Yes Bank in various cases related to the matter.
Read More: HC rejects Dish TV promoter plea against Yes Bank, JC Flowers