NDTV deal: Adanis say no Sebi bar : Adani group rejected claims made by NDTV that regulatory curbs restricted the news network founders to sell their stakes

 The group is trying to execute the takeover through Vishvapradhan Commercial Private Ltd

Gautam Adani: File Photo

TT Special Correspondent   |   Mumbai   |    27.08.22 : The Adani group on Friday rejected claims made by New Delhi Television (NDTV) that regulatory curbs restricted the news network’s founders from selling their stakes in the company. Adani Enterprises Ltd (AEL) said in a statement that the NDTV founders’ arguments were “baseless, legally untenable”.

It added that the founders’ investment entity — RRPR Holding Pvt Ltd (RRPRH) — was not part of any regulatory restrictions and was “bound to immediately perform its obligation and allot the equity shares” to the conglomerate. RRPRH has an equity interest of 29.18 per cent in NDTV.

The Adani group is trying to execute the takeover through Vishvapradhan Commercial Private Ltd (VCPL). It gave Rs 400 crore in loans in two tranches to NDTV’s founders in 2009 and 2010. The collateral for the interest-free loan given by VCPL was in the form of warrants, the exercise of which allowed it to buy a stake in RRPRH. On August 23, AMG Media Networks, a 100 per cent subsidiary of AEL, acquired VCPL.

It then decided to exercise those rights as the loans remain unpaid by Prannoy Roy and Radhika Roy, the founders of NDTV. This follows the terms of the loan agreement which said that VCPL could convert the warrants into 99.9 per cent of the shares in RRPR at any time during the tenure of the loan or thereafter “without requiring any further act or deed on the part of the lender”.

While the Adani group had also announced an open offer to the shareholders of NDTV in line with Sebi regulations, the media firm on Thursday cited an order from the market regulator on November 27, 2020, that imposed restrictions on the NDTV founders from buying, selling or otherwise dealing in securities for a period of two years.

NDTV pointed out that Sebi approval is considered a necessary precursor to VCPL entitlement to convert warrants into equity shares for acquiring 99.5 per cent of RRPRH. Responding to the NDTV contention,  Adani on Friday said RRPR is not a party to Sebi’s 2020 order and the restraint does not apply to the promoter firm. It said that the warrant exercise notice has been issued by VCPL under a contract binding on RRPR.