NDTV Promoters Move Supreme Court Against SAT Order On Rs 5 Crore Penalty In Loan Agreement Case

Adani Group on August 23 announced its plans to acquire a majority stake in NDTV through the acquisition of VCPL, which holds a 99.99 per cent stake in RRPR Holding, a promoter entity of NDTV

New Delhi Television (NDTV) on Tuesday announced that its promoters will move Supreme Court (SC) against an order passed by the Securities Appellate Tribunal (SAT) asking them to pay Rs 5 crore as penalty for the alleged non-disclosure of loan agreements, according to the filing in the stock exchanges.

The company release said that Prannoy Roy and Radhika Roy, founder-promoter and RRPR Holding Private Limited, promoter group, have informed NDTV that they have each filed a civil appeal in the Supreme Court against the order dated July 20, 2022 wherein the SAT asked them to pay Rs 5 crores as penalty for the alleged non-disclosure of loan agreements entered by them. This, despite the tribunal reducing the penalty imposed by Sebi from Rs 25 crore to Rs 5 crore.

According to news reports, the Sebi in December 2020 imposed a penalty on the promoters for 'violating various securities' norms by not disclosing information on certain loan agreements to shareholders. The markets regulator said that the loan agreements had some clauses that had an adversarial effect on the NDTV shareholders.

Earlier in 2017, the regulator had received a complaint from Quantum Securities Pvt Ltd, a shareholder of NDTV. The complaint was about the loan agreements with VCPL (Vishvapradhan Commercial Private Ltd) that was taken over by Adani Group.

In the meantime on September 1, NDTV in an exchange filing informed a major stake sale by its founders to Adani Group would require clearance from the country’s tax authorities, adding another hurdle to the conglomerate’s bid to take control of the media firm.

Adani Group on August 23 announced its plans to acquire a majority stake in NDTV through the acquisition of VCPL, which holds a 99.99 per cent stake in RRPR Holding, a promoter entity of NDTV.

VCPL had issued a loan of Rs 403.85 crore to RRPR Holding in 2009-10. Against this amount, convertible warrants were issued to the lending entity by RRPR, which holds a 29.18 per cent stake in the news channel company.

With the warrants, VCPL had the right to convert them into a 99.9 percent stake in RRPR in case the loan was not repaid. Adani Group first acquired VCPL from its new owner and exercised the option to convert unpaid debt into a 29.18 percent stake in NDTV, which operates three national news channels – NDTV 24x7, NDTV India, and NDTV Profit.