CITING a November 27, 2020, SEBI order, NDTV Ltd informed inventory exchanges Thursday that Adani Group-owned Vishvapradhan Commercial Private Ltd (VCPL) must search the market regulator’s approval earlier than it acquires 99.5 per cent stake in RRPR Holding Pvt Ltd, which in flip holds 29.18 per cent shares within the tv media firm.
Security regulation consultants, nonetheless, stated the SEBI order might not be an impediment. “This transaction does not entail a fresh sale or purchase of securities. Further, it is simply an execution of the arrangement that VCPL and RRPR entered in 2009 and 2010,” a supply within the know of issues informed The Indian Express.
VCPL, an Adani Enterprises’ step-down subsidiary now, had given an interest-free mortgage of Rs 403.85 crore to RRPR Holding in 2009 and 2010, in opposition to which RRPR Holding had issued warrants to VCPL. The warrants entitled VCPL to transform them right into a 99.9 per cent fairness stake in RRPR. RRPR Holding owns 29.18 per cent in NDTV Ltd.
In the disclosure to the inventory exchanges, NDTV stated the SEBI order restrained the founder-promoters Prannoy Roy and Radhika Roy from accessing the securities market, and prohibited them from shopping for and promoting securities, straight or not directly for 2 years, which expires on November 26, 2022.
Another supply near the developments stated that neither did SEBI’s November 2020 order restrain RRPR from dealing in securities transactions nor did the NDTV disclosure Thursday explicitly point out RRPR can not purchase or promote securities. The supply, nonetheless, acknowledged that materials information (VCPL possession) had modified, and the deal finally led to Adani buying 29.18 per cent stake in NDTV, a listed entity.
The Adani Group could await a transparent SEBI nod and even wait for 3 months until November 26, 2022, when the ban on Roys will probably be lifted, in order that the acquisition of RRPR and thereby its possession of NDTV holding takes impact.
Legal consultants contend that the conversion of warrants was part of a decade-plus previous transaction when a mortgage was given by the proposed acquirer – VCPL – and that this entity was now solely exercising its rights to transform the warrants into fairness.
“Ideally warrant conversion should not be an issue. The transaction here is by the entity and the restriction imposed by the regulator is on individuals, so both the issues are not connected. I don’t see an issue here,” stated a high securities regulation knowledgeable.
“Regulatory approval is anyways required for transactions of this nature, as minority and other shareholder interests have to be also looked at and so there is nothing new to it. It is a procedure and the regulator will see if all the rules and procedures have been followed,” the knowledgeable stated.
