NDTV: How Adani bought a business run by an Ambani ally to make an aggressive takeover offer (?)
Prasanta Patnaik
Senior Eminent Journalist
Bhubaneswar:Adani Enterprises revealed on Tuesday that it would use a subsidiary business to buy a 29.18% interest in the NDTV group.
The Adani Group, headed by billionaire Gautam Adani,apparently planning to make an open offer to purchase a further 26% of NDTV’s shares. Adani is rumoured to be close to Prime Minister Narendra Modi. As a result, it would effectively have majority control over one of the most well-known news outlets in India and one of the few that still criticise the Modi administration.
According to a statement by the media company, NDTV founders Radhika Roy and Prannoy Roy, two seasoned journalists, were taken by surprise by the revelation.
However, Reliance India Limited, the conglomerate headed by Mukesh Ambani, who was Asia’s richest man until Adani surpassed him earlier this year, planted the seeds for the takeover almost 15 years ago.
The Reliance relationship:AMG Media Networks Limited, a fully-owned subsidiary of Adani Enterprises, paid Rs 113.74 crore on Tuesday to acquire 100% of the stock holdings in Vishvapradhan Commercial Private Limited. Adani Enterprises is acquiring NDTV stock via this organisation.
Vishvapradhan Commercial Private Limited, a 2008 incorporation, describes itself as a management and advisory services firm but has no assets.
It had presented Radhika Roy Prannoy Roy Private Limited, an organisation that owned a 29% stake in NDTV, with an unsecured loan in the amount of Rs. 403.85 crore in 2009.
For its part, Vishvapradhan Commercial Private Limited received the funds in the same fiscal year in the form of an additional unsecured loan from a different business called Shinano Retail Private Limited.
For its part, Shinano had obtained the funds from Reliance Industrial Investments and Holdings Limited, a member of the Reliance India Group, likewise in the form of an unsecured loan. In actuality, Reliance Industrial Investments and Holdings Limited at the time owned all of Shinao.
The Ministry of Corporate Affairs’ records demonstrate that all of these businesses were interconnected at the time the transactions took place. Shinano, with whom it shared an address, and another business called Teesta Retail Private Limited, both completely owned by Reliance India Industrial Investments and Holdings Limited, were the owners of Vishvapradhan.
Directors of Vishvapradhan were prominent executives at Reliance India Limited at the time.
However, according to statutory filings the company submitted to the corporate affairs ministry in 2012, Vishvapradhan’s ownership changed.
A director at Reliance Jio Infocomm Limited, a division of Reliance India Limited, Mahendra Nahata’s companies Nextwave Televenture Private Limited and Skyblue Buildwell Private Limited were the new owners.
This happened at the same time that Eminent Networks Private Limited, whose owner is Nahata, invested Rs 50 crore in the business and assumed ownership of the loan Vishvapradhan owed to Shinano.
After receiving the Rs 50 crore from Vishvapradhan, Shinano received it and stated in ists corporate papers that the loan had been repaid. Since just 50 crore of the loan’s 400 crore was returned by Vishvapradhan, it is unclear how that occurred.
According to documents submitted by Vishvapradhan to the Ministry of Corporate Affairs this year, Nextwave Televenture held the company wholly up until Tuesday, when the Adani group acquired it.
The records also indicate that NDTV may have never paid back the loan it received from Vishvapradhan. It wouldn’t have mattered, really. Vishvapradhan could convert the loan into 99.9% of the shares in Radhika Roy Prannoy Roy Private Limited “at any moment throughout the life of the loan or thereafter without needing any further act or deed on the side of the lender,” according to Caravan’s 2015 report.
Tuesday saw the occurrence of this
Arrival of Adani
This effectively implied that the Roys had lost control of NDTV long ago and that its takeover was inevitable.
The Adani Group, not Reliance, which had a sword hanging over the Roys for 13 years, delivered the company’s fatal blow, which is astonishing.
The Roys still own more of NDTV than the Adani Group, with a 32.27% share. However, this might soon alter. The LTS Investment Fund, which owns shares in various Adani enterprises, reportedly also holds a 9.75% stake in NDTV, according to an article in the Indian Express. Four other NDTV shareholders combined hold 7.11% of the company. According to Indian Express, the Adani Group would own more than 46% of NDTV if these two groups of investors sold their shares in the open offer.
Simply put, Gautam Adani bought a company on Tuesday that had previously been owned by his rival Mukesh Ambani and had been under the control of one of his close advisors for a decade in order to carry out a hostile takeover of what is arguably India’s most reliable television news channel—a channel with which Modi has not engaged since becoming prime minister.
