NDTV and the Adanis have started to joust over whether the shares of RRPRH in NDTV have been attached by the income-tax authorities.
New Delhi Television Ltd (NDTV) said a major stake sale by its founders to the Adani group would require clearance from India’s tax authorities, adding another hurdle to the conglomerate’s bid to take control of the popular news network.
Their contention was rejected by the Adani group which termed its stand as ``misconceived and misleading” even as it asked RRPR Holding (RRPRH) to convert the warrants held by VCPL into shares. On August 23, the Adanis announced it had taken over VCPL which will give it a 99.99 per cent stake on the conversion of the warrants. In 2017, the income tax department in 2017 provisionally barred the NDTV founders — Prannoy and Radhika Roy — from selling a part of their stake pending a reassessment of their taxes, NDTV said in an exchange filing late on Wednesday.
The Roys informed Adani owned VCPL that “shares of NDTV held by RRPRH were provisionally attached by the Income Tax Authorities in the year 2017, with notification in 2018 that the attachment shall remain in place until completion of reassessment proceedings”.
The Roys also added that the Securities Appellate Tribunal (SAT) had concluded in its July 2022 order: “The intent and language of the loan agreement and call option agreements read with the SAT Regulations makes it clear that there is no direct or indirect control of NDTV by VCPL.”
“The transaction structure does not lead to a conclusion that VCPL has acquired direct or indirect control over NDTV.”
Therefore, the Roys said: “The Income Tax Authorities will be required to clarify whether in the light of the SAT order, the provisional attachment will continue to operate on RRPRH’s equity shares held in NDTV.”
They asked VCPL to join its application to the tax authorities to seek a clarification on whether the attachment of the RRPRH shares was justified. “Radhika and Prannoy Roy may individually require independent approval, under section 281 of the Income Tax Act, from the Income Tax Authorities, to deal with any assets, including indirect shareholding in NDTV, arising from sub judice (impugned) orders,” the regulatory filing said.
However, Adani Enterprises said in a statement that the RRPRH communication lacked ``bona fides and has no merit or basis either in law or in fact and is misconceived’’. It maintained that the income tax order only applies to the shares of NDTV held by RRPRH and in no manner restricts it from completing the formalities in relation to the allotment of equity shares to VCPL on the exercise of the warrants.
“VCPL denies that the steps required to be taken by RRPRH 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,’’ it said.
The Adanis pointed out that the income tax orders have been issued against RRPRH only and for the purpose of securing RRPRH’s continued ownership over the NDTV shares. The orders have not been issued against the Roys individually, even as they also do not relate to their equity ownership in RRPRH.
In this background, the suggestion that Prannoy Roy and 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, Adani said.… Meanwhile, the NDTV scrip was again locked at the upper circuit of 5 per cent on Thursday. At the BSE, the share closed at Rs 490.60 — a gain of Rs 23.25 over the last finish.
