The income tax department in 2017 provisionally prohibited the company’s founders Prannoy and Radhika Roy from selling a portion of their stake as part of a reassessment of their taxes, which put yet another roadblock in the way of the Adani Group’s attempt to acquire control of the media company. As a result, New Delhi Television Ltd. (NDTV) on Wednesday said that the Adani Group would need clearance from tax authorities to proceed with its stake sale.
According to charges that the loans amounted to a transfer of the controlling stake in the network, NDTV said in an exchange filing that tax authorities were already examining whether the loans gave rise to an estimated capital gains tax due of $175 crore.
“Further, RRPRH has intimated VCPL that as individuals, Radhika and Prannoy Roy may individually require independent approval, under section 281 of the Income Tax Act, from the Income Tax Authorities, to deal with any assets, including indirect shareholding in NDTV,” it said.
On August 23, the Adani group revealed plans to buy VCPL, which owns a 99.99% holding in RRPR Holding, in order to acquire a 29.18% stake in NDTV. AMG Media Networks, Adani Enterprises Ltd., Vishvapradhan Commercial Private Limited (VCPL), and Adani Group Companies then sought to buy an additional 26% or 1.67 crore equity shares. An outstanding loan that NDTV’s promoter business RRPR Holding Pvt Ltd had obtained from VCPL is the main driving force for the takeover offer.
The media group’s promoters have claimed that the deal cannot proceed without Sebi’s approval in the days following the announcement of the Adani group’s takeover. Prannoy and Radhika Roy, the founders of NDTV, have cited a 2020 decision from SEBI as evidence that their participation in the Indian stocks market is forbidden. This means that the Roys’ company cannot transfer the shares that Adani was attempting to acquire, according to NDTV. On November 26, 2022, the constraints on the founders of NDTV expire.
The application of the regulator’s earlier order regarding the conversion of warrants into shares, which has become a deciding factor in the hostile takeover battle for the media firm, has been questioned by RRPR Holding Ltd. and the Adani group.