The board of DTL rejected on Wednesday the demand by YES Bank to hold an extraordinary general meeting EGM to consider resolutions citing administrative limitations and absence of prior approvals from the government and lenders.
Private lender YES Bank, which holds 25.93 per cent stake in DTL, had sought the removal of DTL directors Jawahar Lal Goel and others and appointment of the bank's own nominees
The bank had sought their removal for alleged hasty and arbitrary decisions to proceed with the rights issue despite objections raised by the lender.
DTL in filing with BSE said the board considered the factual background, the legal advice and the opinions received from various legal experts.
is a banking company and its stake in DTL emerges from the invocation of pledge shares. There are therefore embargos under regulations and laws of the Banking Regulation Act, 1949 and Sebi's Substantial Acquisition of Shares and Takeovers regulations which prevents it from placing resolutions before shareholders.
also needs to get prior permission from the government Ministry of Information and Broadcasting in respect of national security clearance, and company's Lenders before placing such proposals before shareholders.
The Board has considered its fiduciary duties and it shall be in violation of extant laws if it acts upon the Notice. The board unanimously agreed that the EGM can not be called, as requested by the lender, said the company.
On September 21 had requested DTL to call an EGM to remove Goel and seven directors from the board and induct a new chairperson. The bank had lent Rs 3,000 crore to the Essel Group promoters, but last May invoked the shares pledged by the promoters as the Essel Group defaulted on their loans.
Goel is the younger brother of Subhash Chandra, whose flagship firm Entertainments announced merger with rival Sony to create a $2 billion entertainment giant.