Billionaire Gautam Adani-led Adani Group said that the Income Tax Department's provisional attachment of equity shares of NDTV (New Delhi Television Ltd) held by RRPR Holding does not need any prior approval for exercise of warrants.
"It is clear that the RRPR letter lacks bona fides and has no merit or basis either in law or in fact and is misconceived," Adani Enterprises says in an exchange filing.
The income tax orders only apply to the shares of NDTV held by RRPR and in no manner restrict RRPR from completing the formalities in relation to allotment of equity shares to VCPL on exercise of the warrants, the filing says.
Founded by Radhika and Prannoy Roy, RRPR Holding is the promoter-owned company that owns 29.18% of NDTV.
Vishvapradhan Commercial Pvt Ltd (VCPL), a wholly-owned subsidiary of Adani Group's AMG Media Networks, had entered into a loan agreement with NDTV founders Radhika and Prannoy Roy in 2009-10.
VCPL, which issued a warrant exercise notice to NDTV on August 23, denies that the steps required to be taken by RRPR in terms of the warrant conversion notice require any prior approval from the assessing officer.
"The IT orders have been issued against RRPR only and for the purpose of securing RRPR's continued ownership over the said NDTV shares. The IT orders have not been issued against Mr. Prannoy Roy and Mrs. Radhika Roy individually and do not relate to their equity ownership in RRPR," the Adani-owned entity says.
The suggestion that the Roys will need prior approval of the assessing officer under Section 281 of the Income Tax Act, 1961 is wholly misconceived and has no basis, the conglomerate says. "It is clear that RRPR will remain the absolute owner of the said NDTV shares even after RRPR has completed the steps required under the notice and hence, the question of any prior approval of the assessing officer does not arise."
The Adani group further alleged that the RRPR letter has been issued with the intent to further inordinately delay and seek to justify RRPR's default in compliance with its obligation as set out in the notice and completing the formal steps of allotment of equity shares of RRPR to VCPL.
Adani Group subsidiary VCPL called upon RRPR to withdraw its letter immediately and "cease and desist from repeating the misconceived and misleading statements, suggestions, inferences and assertions made by RRPR in the RRPR letter."
VCPL told RRPR to take all necessary steps and perform its obligations as specified in its earlier notice without any further delay.
RRPR Holding has also written a letter to capital markets regulator Securities and Exchange Board of India (SEBI), asking it to determine whether its previous order restricts conversion of warrants issued to VCPL into equity shares of the news broadcaster.
Meanwhile, shares of NDTV jumped 5% on Friday to cross the ₹500 mark for the first time. The stock rose 5% to ₹519.80 on the National Stock Exchange (NSE).