InvestorQ : Why have NDTV and Adani group sought clarifications from SEBI on the transfer of shares?
ishika Banerjee made post

Why have NDTV and Adani group sought clarifications from SEBI on the transfer of shares?

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2 months ago
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The attempt to take over NDTV by the Adani group has now reached the gates of SEBI. A day after Adani Media (the media venture of the Adani group) bought 29.18% in NDTV, there was a furore. Prannoy and Radhika Roy protested that the stake had been purchased by Adani group without informing the promoters or the company. The promoters of NDTV were unsure if they could authorize the transfer of shares to Adani (from RRPR Holdings) when the current promoters were under a 2-year capital market ban since November 2020.

Now, NDTV and the Adani group have sought clarification from SEBI which will eventually adjudicate on the issue of transfer of shares by NDTV promoters to Adani group. The issue is if the transfer of shares would be tenable since promoters were under ban. Final SEBI decision is pending, but reports suggest that deal for allotment of warrants was taken much before the ban on NDTV promoters. Also, transferring of shares should not be an issue since it is not a voluntary sale of shares but a transfer by operation of law.

NDTV had taken a Rs450 crore loan from Vishvapradhan Commercial (VCPL) in 2009 and the catch was that if the loan was not repaid then VCPL could convert warrants into a 99.5% stake in RRPR Holdings. This is 29.18% stake in NDTV. One argument is that when Adani acquired VCPL, they got unfettered rights to the warrants held by VCPL, letting them convert into NDTV shares. Legal experts opine that the Adani group may have an upper hand in this case as NDTV promoters were trying to use a ban as pretext for not transferring.

The final word from SEBI is awaited with both writing to the regulator for clarifications.

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