New Delhi Television Ltd said its founder’s sale of a major stake to Adani Group required approval from India’s tax authority, adding another hurdle to the group’s efforts to take control of the popular news network.
In 2017, the income tax department temporarily barred founders Prannoy and Radhika Roy from selling some of their shares as part of a tax reassessment, NDTV said in an exchange filing late Wednesday.
NDTV and Adani are in a public spat after the conglomerate run by India’s richest man, Gautam Adani last week unveiled plans to control a majority stake in the news network, seen as a bastion of independent media.
Shares of NDTV rose as much as 5% of the maximum allowed cap in early trading Thursday, the sixth straight day of gains since Adani’s announcement. The stocks are trading at their highest levels in more than 14 years.
Adani has tried to execute the takeover plan by acquiring a little-known Indian company that, more than a decade ago, gave NDTV’s founders a Rs 4 billion ($50 million) loan against warrants which allowed him to buy a stake in the newsgroup anytime.
Adani Group said last week that it had exercised those rights, which NDTV said was done without its consent. The company said that the tax authority was already reviewing whether the loans would incur capital gains tax estimated at Rs 1.75 billion because the loans amounted to a transfer of control of the network. NDTV said it had invited the Adani group of companies to join its application for clarification from the tax authority.
The two sides also asked Sebi separately whether the Roys were restricted from selling shares because of their previous ban on them from trading in the Indian stock market. The ban came after they were investigated for insider trading. Some see NDTV as one of the few independent voices in India’s rapidly polarising media landscape. The takeover attempt has raised concerns among journalists and politicians that a change of ownership could undermine its editorial integrity.