By Abhirup Roy and Aditya Kalra
MUMBAI (Reuters) – India’s Adani Group on Friday challenged claims by New Delhi Television that regulatory restrictions were preventing its founders from selling their stake, prolonging the battle for control of a news network seen as the media’s stronghold independent.
The takeover bid launched by a group led by Asia’s richest man, Gautam Adani, has stoked concerns about NDTV’s editorial integrity.
NDTV sought to block Adani’s move on Thursday, saying its founders Prannoy and Radhika Roy have been banned since 2020 by India’s market regulator from buying or selling shares in the Indian securities market, and will not therefore cannot transfer the shares that Adani is trying to secure.
But Adani said in a statement on Friday that the NDTV founders’ arguments were “baseless, legally untenable”.
He said the founders’ investment entity was not part of any regulatory restrictions and was “required to immediately perform its obligation and allot the shares” to the conglomerate.
“Two parties are clearly at odds now and may have to go to the regulator or the courts for redress,” said Sumit Agrawal, founder of Indian law firm Regstreet Law Advisors and former head of India’s market regulator.
NDTV shares hit the maximum allowable limit of 5% in morning trading on Friday, marking their third consecutive day of gains after Adani showed his hand. The shares are currently trading at their highest level in about 14 years.
Adani is trying to execute the takeover through a little-known Indian company, Vishvapradhan Commercial Private Ltd.
VCPL provided 4 billion rupees ($50 million) in loans to the founders of NDTV more than a decade ago in exchange for mandates allowing it to acquire a stake in the media group at any time.
The conglomerate said on August 23 that it had acquired VCPL and exercised those rights for a 29.18% stake. Separately, he added that he would make an open offer for another 26% stake for up to $62 million. The news network said it was blindsided by Adani’s decision.
NDTV and the market regulator did not immediately respond to requests for comment.
NDTV is upholding a 2020 regulatory order prohibiting the Roys from trading in Indian markets until November 26, 2022, after an investigation found they made unjustified gains related to alleged insider trading in shares of NDTV.
(Reporting by Abhirup Roy in Mumbai and Aditya Kalra in New Delhi; Additional reporting by Tanvi Mehta and M Sriram; Editing by Dhanya Ann Thoppil, Kenneth Maxwell, Ana Nicolaci da Costa)