Adani and NDTV approaches SEBI for clarification on ban

The takeover battle between Adani Group and NDTV (New Delhi Television Limited) is taking an interesting turn as both entities on Monday approached market regulator SEBI asking for a few clarifications.

Securities and Exchange Board of India which is the market regulator for Securities and capital markets in India is responsible for maintaining and enforcing rules and regulations in the capital markets.

NDTV today said that the media company has approached the market regulator and enquired whether the ban placed by SEBI on founder promoters of NDTV restricts them from selling the stake in RRPR Holdings to Adani.

RRPR Holdings Limited which has got 29.18% stake in NDTV is owned by Radhika Roy and Prannoy Roy.

Radhika Roy and Prannoy Roy who are founders of NDTV got banned from accessing securities markets and operating any such transactions in 2020. The ban was placed by SEBI in an insider trading case.

RRPR Holdings had earlier taken a 400 crore loan from Vishvapradhan Commercial Private Limited in Lieu of warrants on 99.99% of shares of RRPR Holdings. The loan was taken by RRPR Holdings on behalf of NDTV.

Following the acquisition of VCPL by Adani Group, they exercised the rights on warrants and converted the loan to 99% equity shares in RRPR Holdings. Adani Group and VCPL asked RRPR Holdings to allot all the equity shares to VCPL within 2 days.

NDTV countered this request by stating that Prannoy Roy and Radhika Roy were not consulted by VCPL when exercising rights on warrants and the ban placed by SEBI on Roy’s make it impossible to transfer share without SEBI approval.

Soon after NDTV claimed SEBI approval was necessary, Adani Group said in a statement that the claims of NDTV and RRPR were baseless and legally untenable.

Even though Adani claims that the ban on Radhika Roy and Prannoy Roy doesn’t affect the contract between RRPR and VCPL, the latest move by both NDTV and Adani indicates the confusion existing regarding the width of the ban placed by SEBI.

Adani Group also said in a different statement on Monday that it has approached SEBI to get clarification on claims put forward by NDTV.

According to Adani, a clarification from SEBI will clear any doubts and confusion existing among shareholders of the media company.

Even though there hasn’t been official response from SEBI regarding the clarification requests, various news reports suggests SEBI has found no objection in VCPL exercising its rights on share warrants.