Stake Sale To Adani Group Needs Approval From Tax Authorities, Says NDTV

Stake Sale To Adani Group Needs Approval From Tax Authorities, Says NDTV

New Delhi Television Ltd (NDTV) has said a major stake sale by its founders to Adani Group would require clearance from the country’s tax authorities, adding another hurdle to the conglomerate’s bid to take control of the popular news network, news agency Reuters said on Thursday.

According to the report, the income tax (I-T) department in 2017 provisionally barred the founders, Prannoy Roy and Radhika Roy, from offloading a part of their stake as part of a reassessment of their taxes, NDTV said in an exchange filing late on Wednesday.

NDTV and Adani have locked horns in public after the conglomerate, run by India’s richest man Gautam Adani, last week unveiled plans to control a majority stake in the media house.

Adani Group’s media arm a week ago said it would acquire a 29.18 per cent stake in NDTV. The comglomerate said that the acquisition of 29.18 per cent stake in the media house will be indirect and will be made through Vishvapradhan Commercial Pvt Ltd (VCPL), a wholly-owned subsidiary of AMG Media Network Ltd (AMNL), owned by Adani Enterprises Ltd (AEL).

Adani has tried to execute the takeover plan by acquiring a little-known Indian firm, which gave Rs 400 crore ($50 million) in loans to NDTV’s founders more than a decade ago in exchange for warrants that allowed it to buy a stake in the news group at any time.

The approach the Adani Group took in executing the deal drew most attention in the news industry.

Last week, Adani Group said it had exercised those rights, which NDTV said was done without its consent.

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NDTV on Wednesday said that tax authorities were already reviewing whether the loans gave rise to an estimated capital gains tax of Rs 175 crore based on allegations that they amounted to a transfer of the controlling interest in the network. The news channel had also invited Adani Group’s company to join its application to the tax authorities for clarification.

Tax authorities and Adani Group, however, did not immediately respond to Reuters’ requests for comment.