Adani Group says SEBI nod not needed for NDTV stake buy

The Adani Group has clarified that they will not require any permission from market regulator SEBI for the deal where they are indirectly acquiring the shares of NDTV.

It has said that Vishwaradhan Commercial Pvt Ltd (VCPL), their indirect subsidiary, received a letter from RRPR Holdings, a company belonging to Radhika and Prannoy Roy, stating that a November 2020 SEBI order restricted them from selling their stake. In response to this, the Adani Group has said that RRPR, an unlisted company, was not party to the SEBI order.

VCPL had given a loan of Rs 403 crore to RRPR Holdings, the private company of the Roys, in 2009. Against the loan, RRPR had issued fully convertible warrants to the tune of 99.99 per cent to VCPL. RRPR Holdings has 29.18 per cent stake in NDTV. Since the Roy’s could not return the loan, VCPL is now converting its entire warrants into equity shares to take control of RRPR Holdings and thus also gets indirect control of NDTV shares.

After RRPR wrote a letter to VCPL informing it about the SEBI order, NDTV separately issued clarifications to the exchanges stating that RRPR may not be able to transfer its stake to VCPL due to the restrictive SEBI order. In November 2020, SEBI had barred the Roys from dealing in the stock markets or offloading their stake.

The Adani Group has now said that RRPR is not a party to the SEBI order and consequently the restraints as pointed out by RRPR do not apply to it . Further, the warrant exercise notice issued by VCPL under a contract is binding on RRPR, which is therefore obligated to comply with its contractual obligations.

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“Performance of obligations by RRPR pursuant to the Warrant Exercise Notice will not result in violation of the SEBI Order as there is no, direct or indirect, dealing in any securities of Mr. Prannoy Roy or Mrs. Radhika Roy pursuant to the exercise of the warrants by VCPL and allotment of shares by RRPR. VCPL, therefore, does not agree with RRPR that prior written approval from SEBI is required for allotment of shares to VCPL on exercise of warrants. On August 23, 2022, the amount of Rs. 1,99,00,000, being the amount payable for the 19,90,000 equity shares of RRPR pursuant to exercise of warrants, was paid by VCPL and received by RRPR. Any subsequent attempt by RRPR to return the money received or the original warrant certificate shall have no legal effect on the exercise of warrants by VCPL which has been completed,” Adani Group’s response to the Roy’s and RRPR said.

Adani Group has clarified that contentions raised by RRPR in the letter are baseless, legally untenable and devoid of merit. “RRPR is, therefore, bound to immediately perform its obligation and allot the equity shares as specified in the Warrant Exercise Notice,” Adani has said.