I-T dept says its approval not required for RRPR's takeover by Adani firm VCPL

RRPR Holding, the promoter group firm of NDTV, does not require any approval from the Income Tax Department for the conversion of warrants into equity shares, Adani Group firm VCPL has informed the media company.

In a regulatory filing, NDTV said RRPR Holding and the company has received a letter from Vishvapradhan Commercial Private Ltd (VCPL) informing that the Adani Group firm had approached the I-T department on the issue, which in its reply said no such restriction applies on the conversion of warrants.

"The reply dated September 7, 2022, from the Additional Commissioner of Income Tax, Central Range-02, New Delhi has confirmed there are no restrictions on RRPRH acting on the VCPL exercise of the option for converting its warrants into 99.50% equity shares of RRPRH," said NDTV in a late-night filing on Friday, while updating about the VCPL's letter.

VCPL has also sent a letter to market regulator Sebi on September 8, 2022, about its communication with the Income Tax Authority, the filing said.

Earlier this month RRPR Holding informed VCPL, which along with two other Adani group firms has launched a hostile takeover bid for the media firm, that its stakeholding in NDTV has been provisionally attached by the I-T authorities and requires their approval for the transfer.

NDTV had said that its founders Radhika and Prannoy Roy have informed that RRPR Holding has intimated to VCPL that the attachment of the shareholding, notified in 2018, shall remain in place until the completion of reassessment proceedings.

However, I-T department letter dated September 7, 2022, said, “The prohibition under the above-mentioned orders u/s 281B during the period of their operation is on RRPR Holding for selling or transfer of its shareholding in NDTV and from creating/causing any charge thereon only, irrespective of the shareholding pattern of RRPR Holding and who exercises control thereon and not on the issuance of shares of RRPR Holding".

Earlier, the Adani group had also rejected NDTV's contention terming it as "misconceived and misleading" statements while asking RRPR Holding to convert the warrants into equity shares.

On August 23, the Adani group announced the acquisition of a 29.18% stake indirectly in NDTV through the acquisition of VCPL, which holds a 99.99% stake in RRPR Holding.

Following this, Adani group firms, VCPL along with AMG Media Networks and Adani Enterprises Ltd, proposed to acquire an additional 26% or 1.67 crore equity shares through an open offer, in the company, which operates three national news channels - English news channel NDTV 24x7, Hindi news channel NDTV India and business news channel NDTV Profit.

Adani Group will tentatively launch its open offer on October 17 for acquiring an additional 26% stake in media firm NDTV and close on November 1, according to an advertisement by JM Financial earlier, which is managing the offer.

NDTV had taken a loan of Rs 403.85 crore in 2009-10 and against this amount, warrants were issued by RRPR. With the warrants, VCPL had the right to convert them into a 99.9% stake in RRPR in case the loan was not repaid.

Adani group first acquired VCPL and exercised the option to convert unpaid debt into a 29.18% stake in the news channel company.

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