NDTV promoter Prannoy Roy 'legally' continue to be promoter of NDTV despite resignation

 As of early Wednesday, the exchange data showed that Adani's open offer drew bids for 5.3 million shares. This makes Adani the biggest shareholder in NDTV...

Prannoy Roy

Agencies, New Delhi, 30th November 2022: NDTV promoters Prannoy Roy and Radhika Roy resigned from the board of RRPR Holding, one of the promoters of the New Delhi-based media company, but they legally continue to be the promoters of NDTV.

On November 29, 2022, the NDTV Board approved the resignation of Prannoy Roy and Radhika Roy as Directors of RRPR Holding facilitating a tighter grip for the Adani Group over the company. The Roys are the co-founders of NDTV.

The RRPR Holding Private Limited board has also appointed Sudipta Bhattacharya, Sanjay Pugalia and Senthil Chengalvarayan as Directors on RRPRH Board with immediate effect.

"NDTV has been informed by the Promoter Group vehicle RRPR Holding Private Limited (RRPRH) that the Board of Directors at the meeting held today i.e. November 29, 2022, have approved the resignation of Dr. Prannoy Roy and Mrs. Radhika Roy as Directors on the Board of RRPRH, with effect from the close of business hours of November 29, 2022," said a regulatory filing by the NDTV.

This development comes a day after RRPR Holding on Monday informed that it had transferred shares constituting 99.5% of its equity capital to the Adani Group-owned Vishvapradhan Commercial (VCPL).

This long-pending transfer of shares gave the Adani Group control over a 29.18% stake in NDTV.

The group is also conducting an open offer for an additional 26% stake in the media firm. As of early Wednesday, the exchange data showed that Adani's open offer drew bids for 5.3 million shares, or 31.78% of the 16.8 million shares on offer so far. This makes Adani the biggest shareholder in NDTV with around 38% stake, ahead of the Roys who together hold 32%.

According to experts, the Roys remain the promoter of NDTV by legal definition.

"They will need to step down from the Board and management, and then the company has to pass a resolution for de-promoterisation of Roys. Depromoterisation will happen only if they choose to sell their 32% direct shareholding," says Shriram Subramanian, founder of proxy advisory firm Ingovern Research Services.

He further says that a resolution should also be passed for the recognition of new promoters (depending on which entity the Adanis want as promoters).

It must be reiterated here that Roys have only resigned from the board of RRPR Holdings, and not from the Board of NDTV.

RRPR Holdings, which was a promoter group entity and then held only 7.56% stake in NDTV, took the loan on behalf of NDTV from Vishvapradhan Commercial Private Limited (VCPL) in two tranches (Rs 350 crore in July 2009 and another Rs 53 crore in January 2010).

As per the loan agreement, RRPR was required to issue warrants to VCPL, which were convertible into equity shares aggregating to 99.99% of share capital of RRPR.

The loan agreement also required Pannoy Roy and Radhika Roy, who together held 55.5% in NDTV at the end of June 2009, to transfer their shares in RRPR Holdings. Due to these terms, RRPR Holdings stake in NDTV increased to 29.18% by January 2010. As mentioned earlier, that stake has now been transferred to VCPL. 

Earlier in August this year, Vishvapradhan Commercial Private Limited (VCPL), a wholly owned subsidiary of AMG Media Networks Limited (AMNL) which is a 100 per cent subsidiary of Adani Enterprises Limited (AEL), exercised the rights and acquired 99.5 per cent of the equity shares of RRPR Holding Private Limited, a promoter group company of NDTV.

Following this, Adani Group decided to make an open offer to acquire the next 26 per cent state stake in NDTV, which will take the group's total stake to 55.18 per cent, enough to take the ownership right of NDTV.

Earlier in October, the Adani Group informed both exchanges, BSE and NSE, that its indirect subsidiary, Vishvapradhan Commercial Pvt Limited (VCPL), had made an open offer to the public shareholders of New Delhi Television Ltd.