NDTV promoter group firm RRPR Holding will not require I-T department’s go-ahead to convert warrants into equity shares to Visvapradhan Commercial (VCPL), an indirect subsidiary of Adani Enterprises, a notification said on Friday evening.
On August 23, VCPL notified RRPR Holding that it was exercising its rights to convert warrants issued to it in 2009 into equity shares, which would give it control of 99.5 per cent of RRPR Holding.
In a current notification to the stock exchanges, VCPL has said it had approached the Income Tax department for clarity on the matter. To which, the department has said that there were no restrictions on RRPR to carry out the exercise of warrants into equity.
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The reply from the Additional Commissioner of Income Tax stated: “The prohibition under orders u/s 281B during the period of their operation is on M/s. RRPR Holding Private Limited for selling or transfer of its shareholding in M/s. New Delhi Television Limited and from creating/causing any charge only, irrespective of the shareholding pattern of M/s. RRPR Holding Private Limited who exercises control thereon and not on the issuance of shares of M/s. RRPR Holding Private Limited. "
Last week, RRPR had said that it would need the I-T department’s nod to convert the warrants, which was 29.18 per cent. The Adani Enterprises had rejected RRPR Holding's claim, highlighting that its claims are not merit-based or law-based, and that, it was misconceived on its part.
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In an exchange filing, the company said that the IT Orders are only applicable to the NDTV shares held by RRPR. This would not restrict the firm (RRPR) from completing the formalities of allotting equity shares to VCPL on the exercise of the warrants.
On August 23 this year, Adani in a surprise announcement said that it had acquired 28.18 per cent stake in NDTV and would launch an 'open offer' to acquire an additional 26 per cent. AMG Media Networks, a wholly-owned subsidiary of Adani Enterprises, acquired VCPL for Rs 113.7 crore in August 2022. VCPL had warrants to convert into equity in case a loan of over Rs 403.85 crore given to NDTV was not repaid.
The announcement came as a shock to NDTV promoters and founders Radhika and Prannoy Roy as they reportedly said that the acquisition did not have their consent. This triggered the controversy around the takeover bid.
Also read: Not just SEBI, need Income Tax dept nod as well on warrants' conversion: NDTV founders