Adani rejects NDTV contention that stake sale needs I-T Dept approval

Adani Enterprises on Thursday rejected RRPR Holding's contention that it would need the Income Tax department's nod to convert warrants into equity shares to Vishvapradhan Commercial (VCPL), its indirect subsidiary. RRPR is a promoter group entity of New Delhi Television (NDTV), which is at the centre of an acquisition by the Adani group. 

Adani Enterprises said that the RRPR disclosure lacked bonafides and had no merit or basis either in law or in fact and was misconceived.

"The IT Orders only applies to the shares of NDTV held by RRPR and in no manner restricts RRPR from completing the formalities in relation to allotment of equity shares to VCPL on exercise of the warrants," it said in an exchange filing.

The company said that VCPL had called upon RRPR to withdraw its contention and desist from repeating misleading statements. "VCPL has again called upon RRPR to take all necessary steps and perform its obligation as specified in the notice, forthwith and without any further delay," it said. 

AMG Media Networks, a wholly-owned subsidiary of Adani Enterprises, had acquired VCPL for Rs 113.7 crore last week, adding that it had exercised its rights to convert warrants held by VCPL in RRPR into equity shares. This was to the tune of 29.18 per cent, which would trigger a mandatory open offer for an additional 26 per cent stake in the media company.

On Thursday morning, RRPR said that the transaction would require "approvals and/or clarifications from the Income Tax Authorities", adding that they were provisionally attached by the Income Tax Authorities in the year 2017, with notification in 2018 that the attachment would remain in place until completion of reassessment proceedings.

RRPR had also invited VCPL to join its application to the income tax authorities seeking clarification over the deal.

Adani Enterprises said that the disclosure by RRPR had been issued with the intent to further "inordinately delay" and seek to justify its default in compliance with its obligation towards allotment of equity shares to VCPL.

The Adani group has already announced launch of its open offer on October 17 for acquiring an additional 26 per cent stake in NDTV.

The open offer for acquiring 16.7 million equity shares, for which a price of Rs 294 per share has been fixed, will tentatively close on November 1. If fully subscribed at a price of Rs 294 per share, the open offer will amount to Rs 492.81 crore.

NDTV founder promoters, however, have said that the deal cannot go ahead without Sebi's nod, since they have been restrained from the securities market for two years. That period ends in November this year.

RRPR and the Adani group have approached Sebi, seeking clarity on the matter.