Events are taking a very interesting turn in the latest dispute between Adani Enterprises and the promoter company of NDTV, RRPR Holding Limited.
Adani Group has hit back at statements made by NDTV in a filing on Thursday, that SEBI approval was necessary for the acquisition and transfer of shares. Adani Enterprises stated that the arguments raise against fulfilling the obligations of RRPR Holdings, to hand over equity shares to VCPL and Adani Group, were “baseless, Legally Untenable and devoid of merit”.
NDTV – Adani takeover dispute
Following the acquisition of Vishvapradhan Commercial Private Limited (VCPL) by AMG Media Network Limited of Adani, VCPL exercised warrants it had received from RRPR Holdings almost a decade ago. The warrants which can be converted into a 99.99% stake in RRPR Holdings, were issued by RRPR Holdings in 2009-10 against a loan of 50 million dollars from VCPL.
Adani Enterprises and AMG Media Network Limited through the acquisition of VCPL and exercising warrants acquired a 99.95% stake in RRPR Holdings indirectly. This meant that a 29.18% stake in NDTV which was owned by RRPR Holdings is now indirectly under the control of Adani Group.
Following the aforementioned events Adani Enterprises, AMG Media Network Limited and VCPL had asked RRPR Holdings to hand over all equity shares owned by the company to VCPL and its owners, Adani Group.
In the wake of the events, NDTV stated that Adani Group needs regulatory approvals from the Securities and Exchange Board of India to acquire any kind of stake in the promoter group of NDTV. NDTV cited a ban placed by SEBI on Prannoy Roy and Radhika Roy, which makes SEBI approval necessary for such transfer of shares.
According to NDTV, Prannoy Roy and Radhika Roy, who are founders and promoters of the New Delhi Television Limited were barred from accessing securities markets in India by SEBI on November 27th, 2020. They also were prohibited from taking part in any activities such as buying, selling or dealing with any kinds of securities directly or indirectly.
The ban which was placed for 2 years is supposed to end on November 26th 2022. NDTV, therefore, stated that Adani Group required permission from SEBI to acquire 99.5% in RRPR Holdings, which would result in 29.13% shareholding in NDTV, the target company.
The filing with exchanges also stated that NDTV and RRPR Holdings have informed VCPL about the current position of the companies regarding their request to hand over the shares.
Adani Enterprises said in a rebuttal letter that RRPR Holdings is not a party to the SEBI order which banned Radhika Roy and Prannoy Roy. Therefore, anything stated in those orders is not applicable to contracts entered by RRPR Holdings and VCPL.
According to Adani Enterprises, the Warrant Exercise Notice was issued by VCPL on the basis of a contract the company entered with RRPR Holdings. As the contract is binding and legal, RRPR Holdings are still under obligation to follow the terms of contract and allot all the shares required under the Warrant Notice, to VCPL.
