Mumbai : The Securities and Exchange Board of India (SEBI) has concluded in an internal consultation that there is no bar on RRPR Holding Limited, the promoter arm of news broadcaster New Delhi Television Limited (NDTV), from allotting shares to the Adani Group. Said direct knowledge of the thinking of the regulator.
The first of the three persons mentioned above said, “An internal note has been put up by the Corporate Finance Department in consultation with the Legal Department in the regulator clarifying that there is no bar on RRPR Holding which can bar it from allotment of shares.” Is.”
SEBI’s stand, in anticipation of a possible reference of the matter to the regulator, is likely to ease its fight for the Gautam Adani-led group along with promoters Radhika Roy and Prannoy Roy to control NDTV.
In a surprise move on August 23, the infrastructure giant acquired a 29.18% stake in the broadcaster by indirectly buying out Vishwapradhan Commercial Private Limited (VCPL), which owned convertible debentures in RRPR. Adani Group also offered to buy 26% more from the open market as mandated by law.
NDTV pushed back against the acquisition, claiming that the transfer of shares required a prior regulatory approval as SEBI barred its founders from trading in shares for two years till November 26. However, the Adani Group dismissed the contention, countering the owners of NDTV that no such approval is required. VCPL had acquired the debentures in FY 2010 404 crore loan was given to the promoter holding company. As per the takeover notice, NDTV was required to allot shares to VCPL by August 25. There is no transfer of shares.
An email query sent to the regulator seeking comment was not answered till press time.
Another person said that the Adani group may approach the regulator to facilitate the share allotment. “If the shares are still not allotted, Adani may have to opt for arbitration to enforce the agreement,” the person said.
The loan agreement signed between RRPR and RRPR states, “Any dispute between the parties relating to or relating to the matters set out in this agreement shall be referred to binding arbitration under the Arbitration and Conciliation Act, 1996. The arbitration proceedings shall be held in Mumbai. Will be.” VCPL. A copy of the completed loan agreement has been reviewed by Mint. An email sent to an Adani Group spokesperson as well as a text to the CEO of NDTV, queries were not immediately answered.
SEBI’s internal note has been drafted by analyzing loan agreements, its orders, orders of the Securities Appellate Tribunal (SAT) and directions passed by the Supreme Court in a related case against NDTV and its promoters. Further, SEBI analyzed past instances where pledged shares were kept out of the purview of the SEBI ban, said the third person.
“Sebi’s internal note agrees with Adani’s view. Ban belongs to Royce and not RRPR, the holding company. There are instances of pledged shares not being part of the securities market restriction,” said the second of the two people cited above.
As per the loan agreement, the pledge is made before the SEBI ban. The loan agreement states, “The Borrower shall issue a convertible warrant, convertible into equity shares up to 99.99% of the fully diluted share capital of the Borrower at the time of conversion, to the Lender immediately after the execution of this Agreement.”
RRPR signed two loan agreements with VCPL. The agreement on 21 July 2009 entitles VCPL to acquire a 26% stake in lieu of a loan of Rs. 350 crores on the exercise of the warrant. A second agreement was signed in January 2010 with the same terms and conditions, under which VCPL was entitled to buy an additional 4% against a loan. 53.85 crore if warrant is exercised. Meanwhile, NDTV has extended its Annual General Meeting for the year by a week to September 27 without assigning any reason.
In the case of shares pledged by the promoters of Parsvnath Developers Limited in October 2016, the regulator issued no objection to the issue of pledge against the shares. These shares were stuck due to a regulatory ban against lender First Financial Services Ltd. In that case also, SEBI ruled that the restriction was not on the pledged shares. Further, Roy has filed an appeal against the SEBI order dated November 2020. On 15 February 2021, SAT passed an interim direction asking Roy to deposit half the money. A fine of 27 crores has been imposed on them. The matter went to the Supreme Court, which directed SAT to hear the appeals without insisting on any deposit. SAT will hear the appeal on September 27.
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