India’s NDTV seeks to block Adani takeover on regulatory issues

Published
15
From left to right: NDTV founder Prannoy Roy, billionaire tycoon Gautam Adani and NDTV co-founder Radhika Roy. — Reuters/Twitter
From left to right: NDTV founder Prannoy Roy, billionaire tycoon Gautam Adani and NDTV co-founder Radhika Roy. — Reuters/Twitter

India’s New Delhi Television Ltd (NDTV) on Thursday sought to block Gautam Adani’s attempt to acquire a majority stake in the news network, saying regulatory restrictions meant the bid from the billionaire tycoon’s group could not proceed.

In a stock exchange filing, NDTV said its founders Prannoy and Radhika Roy have since 2020 been barred from buying or selling shares in India’s securities market, and so cannot transfer shares which Adani was trying to seek in a bid to exert control.

Adani’s conglomerate on Tuesday said it was seeking a controlling stake in the news channel, a move NDTV said was “entirely unexpected” and was without any discussion or consent of the network.

NDTV is regarded as one of the few media groups that often takes a critical view of the ruling administration’s policies.

Read: India’s NDTV — How Adani acquired a firm controlled by an Ambani aide to launch a hostile take-over bid

The 2020 Securities and Exchange Board of India order cited by NDTV stated the regulator had prohibited the Roys from trading in Indian markets until Nov 26, 2022 after an investigation found they made wrongful gains in a case related to suspected insider trading of NDTV shares.

“This seems like an effort by NDTV to stall or slow down the process, but other than cause a delay, it is unlikely going to stop the acquisition moving forward,” said Pritha Jha, a partner at Indian law firm Pioneer Legal, which is not involved in the case.

Shares in NDTV rose to the maximum permitted limit of five per cent in early trade on Thursday.

At the heart of Adani’s attempt is a little-known firm called Vishvapradhan Commercial Private Limited (VCPL), founded in 2008, from which Roys had years ago taken Rs4 billion ($50 million) loan. In exchange, they had issued warrants convertible into equity shares.

The Adani Group said on Tuesday it had acquired VCPL and was moving ahead to exercise those rights.

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