Adani Group rejects NDTV's contention that transfer of RRPR ownership to VCPL needs IT Department's nod
Ahmedabad, September 1, 2022
The Adani Group today rejected the contention of RRPR Holding Private Limited (RRPR), a promoter group company of NDTV, that any dilution of equity ownership in RRPR may require prior approval under section 281 of the Income Tax Act, 1961.
NDTV promoters Radhika Roy and Pranoy Roy had made the contention in a letter to the Adani Group after the latter had announced on August 23 that AMG Media Networks Limited (AMNL), a wholly owned subsidiary of Adani Enterprises Limited (AEL), would indirectly acquire 29.18% stake in NDTV and launch an open offer to acquire up to another 26% of the news television channel.
A press release from the Adani Group had said on that date that AMNL’s wholly owned subsidiary Vishvapradhan Commercial Private Limited (VCPL) holds warrants of RRPR Holding Private Limited (RRPR), entitling it to convert them into 99.99% stake in RRPR.
"VCPL has exercised warrants to acquire 99.5% stake in RRPR. Such acquisition will result in VCPL acquiring control of RRPR," the release said.
AEL had given the NDTV promoters two days to transfer the equity shares of RRPR to VCPL.
In a filing to the stock exchanges today, AEL said VCPL had received a reply on behalf of RRPR whereby it had cited a provisional attachment order and an office order passed by the Income Tax Authorities in relation to 1,88,13,928 equity shares of NDTV held by RRPR, issued to RRPR, provisionally attaching the shares held by RRPR in NDTV.
"RRPR’s letter further states that Mr. Prannoy Roy and Mrs. Radhika Roy have brought to the attention of RRPR that any dilution of equity ownership in RRPR may require prior approval under section 281 of the Income-Tax Act, 1961 and proposes that VCPL either by itself or with RRPR seeks clarity in this regard," AEL said.
In its response, AEL has said that the RRPR letter lacks bona fides and has no merit or basis either in law or in fact, and is misconceived.
"The IT orders only apply to the shares of NDTV held by RRPR and in no manner restrict RRPR from completing the formalities in relation to allotment of equity shares to VCPL on exercise of the warrants.
"VCPL denies that the steps required to be taken by RRPR in terms of the warrant conversion notice dated August 23, 2022 issued by VCPL requires any prior approval from the Assessing Officer, under Section 281 of the Income-tax Act, 1961, as alleged or at all.
"The IT orders have been issued against RRPR only and for the purpose of securing RRPR’s continued ownership over the said NDTV shares. The IT orders have not been issued against Mr. Prannoy Roy and Mrs. Radhika Roy individually and do not relate to their equity ownership in RRPR. In this background, the suggestion that Mr. Prannoy Roy and Mrs Radhika Roy will need prior approval of the Assessing Officer under Section 281 of the Income Tax Act, 1961 is wholly misconceived and has no basis. It is clear that RRPR will remain the absolute owner of the said NDTV shares even after RRPR has completed the steps required under the notice and hence, the question of any prior approval of the Assessing Officer does not arise," it said.
AEL said it was evident that the RRPR letter had been issued "with the intent to further inordinately delay and seek to justify RRPR’s default in compliance with its obligation as set out in the notice and completing the formal steps of allotment of equity shares of RRPR to VCPL."
"VCPL has called upon RRPR to withdraw the RRPR letter immediately and cease and desist from repeating the misconceived and misleading statements, suggestions, inferences and assertions made by RRPR in the RRPR Letter. VCPL has again called upon RRPR to take all necessary steps and perform its obligations as specified in the Notice, forthwith and without any further delay," AEL added.