According to NDTV, regulatory constraints prevented the wealthy tycoon’s organization from proceeding with its proposal.
It claims that its founders have been prevented from purchasing or selling shares in India’s stock exchange since 2020.
MUMBAI: India’s New Delhi Television Ltd (NDTV) tried to halt Gautam Adani’s effort to purchase a controlling interest in the news network on Thursday, claiming that regulatory limits meant the billionaire tycoon’s group’s deal could not advance.
Some see NDTV as one of the few independent voices in India’s highly polarizing media environment, and the acquisition effort by Asia’s wealthiest man has sparked fears among journalists and politicians that a change in ownership may jeopardize the channel’s journalistic integrity.
According to a stock exchange filing, NDTV’s founders Prannoy and Radhika Roy have been restricted from buying or selling shares in India’s securities market since 2020, and so cannot transfer shares that Adani was attempting to gain in order to take control.
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Adani’s conglomerate said on Tuesday that it was pursuing a controlling interest in the news channel, a move that NDTV described as “very unexpected” and conducted without discussion or agreement from the network.
According to an order published by NDTV from the Securities and Exchange Board of India in 2020, the regulator barred the Roys from trading in Indian markets until Nov. 26, 2022, after an inquiry determined they made improper gains due to alleged insider trading of NDTV shares.
“This appears to be an attempt by NDTV to block or slow down the process, but it is unlikely to stop the transaction from coming ahead,” said Pritha Jha, a partner at Indian legal firm Pioneer Legal.
In early trade on Thursday, NDTV shares climbed to the maximum allowable limit of 5%.
Times Group’s Times Now and Network18’s CNN-News18, both backed by Indian billionaire Mukesh Ambani, are among NDTV’s business rivals.
On Twitter, Jairam Ramesh, a leader of India’s main opposition Congress party, said Adani’s acquisition proposal “is nothing more than a blatant ploy to dominate and strangle any semblance of an independent media.”
Adani has not responded to concerns about media independence raised by the acquisition offer.
At the core of Adani’s endeavor is a little-known company named Vishvapradhan Commercial Private Limited (VCPL), which was created in 2008 and from which the Roys took a 4 billion rupee ($50 million) loan years ago. They had issued warrants convertible into equity shares in exchange.
The Adani Group announced on Tuesday that it had bought VCPL and was proceeding with the exercise of those rights.
Adani comes from Gujarat, the western state where Narendra Modi served as chief minister for nearly 13 years before becoming prime minister. The major opposition Congress party in India has frequently accused Adani and other billionaires of receiving preferential policy treatment from Modi’s federal cabinet.
When political parties accused Adani of getting land at low prices in Gujarat in 2014, Adani responded in press interviews that the accusation was part of a “political allegation,” and that “no special favors” had been obtained.