NDTV
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Contents |
Ownership
Vishvapradhan Commercial (VCPL): 2009-18
Sebi orders Delhi co to make open offer for NDTV, June 27, 2018: The Times of India
Markets regulator Sebi ordered Delhi-based Vishvapradhan Commercial (VCPL) to make an open offer for NDTV, which it failed to do after it indirectly acquired majority control of the media house in 2009.
VCPL had taken a majority stake after advancing a Rs 350-crore convertible loan to the promoters of NDTV. The money for the loan was sourced from Reliance Strategic Investment, a subsidiary of RIL, Sebi said in an investigation report. Sebi has ordered VCPL to make the open offer within 45 days. Moreover, the company has been asked to pay interest at 10% from the date of the alleged violation of takeover guidelines to shareholders whose shares are accepted under the offer.
Established in 2008, the ownership of VCPL had changed hands from RIL to Nahata group, from which Reliance had bought Infotel Broadband in 2010 to re-enter the telecom business, a PTI report said. RIL now runs its telecom business under the Reliance Jio brand.
The Sebi order follows an investigation that showed the terms of the 10-year loan advanced in 2009 from VCPL to NDTV’s promoters was “not a normal investment transaction”. In its order, Sebi said that various loan conditions — including a non-compete term — gave VCPL a 52% control over NDTV. VCPL, which was engaged mainly in wholesale trading, had a revenue of only Rs 60,000 in FY17. However, it had over Rs 400 crore of long-term loans and advances in its books. The regulator said that the company and its associates “had neither the history of advancing such loans nor do they appear to have had the financial wherewithal to advance loans on such liberal terms”.
Looking at the terms of the loan, including the fact that no interest was charged, Sebi said that “the elaborate mechanism adopted by VCPL and its associates appear to be solely to deflect attention from this acquisition and thus covetously overcome the obligations imposed by the Takeover Regulations”.
Run-ins with the government
2018: Sebi fine: ₹10L on NDTV, ₹3L each on 4 executives
March 18, 2018: The Times of India
Markets regulator Sebi has fined media company NDTV of Rs 10 lakh and of Rs 3 lakh each on four top executives with the firm — Prannoy and Radhika Roy, Vikramaditya Chandra and Anoop Singh Juneja — for delayed disclosure of a Rs 450-crore income tax notice in 2014.
In its 23-page order, Sebi said there were allegations against K V L Narayan Rao, NDTV’s executive vice chairman, but proceedings against him were stopped after his death last year.
Sebi said it had conducted investigation based on a complaint received from Quantum Securities, a shareholder of NDTV, that the company did not disclose the order of the Income Tax Department, within two days of receipt of information, to the stock exchanges.
Sebi said that the persons in charge of a company or the principal officer are liable for the compliance of clause 36 of the listing agreement, which deals with disclosure by a listed company of any share price sensitive information. “These people constitute the management of the company who are responsible for the day-to-day and overall operations of the company. Further, it is an admitted fact that the decision not to disclose the tax demand was a conscious decision taken by the management of NDTV,” the Sebi order said.
Earlier NDTV was penalised of Rs 2 crore through a different proceeding with respect to non-disclosure of the same income tax demand.
2019/ Roys can’t hold exec posts, go to market for 2 years: Sebi
June 15, 2019: The Times of India
Roys can’t hold exec posts, go to mkt for 2 years: Sebi
Mumbai:
Markets regulator Sebi on Friday barred popular TV personality Prannoy Roy, his wife Radhika Roy and RRPR Holdings—all three promoters of NDTV—from the market for two years for violating various Sebi regulations relating to disclosure of important information to minority shareholders of the company. Sebi also barred Roy and his wife from being directors of NDTV for two years and of any other listed firm for a year. The order is effective immediately; the existing holdings (including mutual fund units) of the three entities will be frozen. The ban was imposed after a Sebi probe found the three did not disclose three important loan pacts to minority shareholders.
Will take urgent legal action: NDTV’s Roys
One of the agreements was with ICICI Bank while the other two were from Vishvapradhan Commercial (VCPL). In 2009, VCPL had indirectly acquired control of NDTV through a Rs 350-crore loan which was sourced from a group company of Reliance Industries.
Last year, Sebi had asked VCPL to make an open offer for NDTV. Reacting to the Sebi order, in a joint statement, Radhika and Prannoy Roy said that they believed the order was based on an incorrect assessment and was “a highly unusual and perverse direction”. The Sebi order “delves into and presents conclusions on issues that were not raised in the showcause notice”, and they “will take urgent legal action”, the statement said.
In 2017, Sebi had received complaints from Quantum Securities, a shareholder in NDTV, about alleged violation of rules by its promoters when it took the loan from VCPL.
This loan, which was used to pay back an earlier loan from ICICI Bank, did not carry any interest while the one from the bank carried a 19% annual rate of interest. However, there were several clauses in the loan agreement between NDTV and VCPL which effectively gave majority control of the company to the lender.
According to Sebi, such clauses were price sensitive and should have been disclosed by the promoters to NDTV’s shareholders through the company. The promoters of NDTV had signed a second loan agreement with VCPL for a loan of nearly Rs 54 crore that indirectly gave a 30% stake in the media company to the lenders through conversion of warrants. Even these clauses were not communicated to NDTV’s shareholders.
Sebi said that NDTV should have intimated such information to its public shareholders to help them take informed investment decisions. “The loan agreements were unmistakably structured as a scheme to defraud the investors by camouflaging the information about the adversarial terms and conditions impinging upon the interest of NDTV's shareholders,” Sebi said in its 51-page order.
