MUMBAI (Reuters) -India’s Adani group rejected claims by New Delhi Television Ltd that a major stake sale by its founders would require clearance from India’s tax authorities, as a public wrangle to take control of the popular news network intensified.
The Adani conglomerate run by India’s richest man, Gautam Adani, last week unveiled plans to acquire a majority stake in the news network, seen as bastion of independent media.
NDTV late on Wednesday said the income tax department in 2017 provisionally barred the network’s founders – Prannoy and Radhika Roy – from selling a part of their stake as part of a reassessment of their taxes.
But Adani said on Thursday no such approval was required and that the founders tried “to further inordinately delay” the deal.
Shares in NDTV rose to the maximum permitted limit of 5% in morning trade on Thursday, their sixth straight day of gains after Adani’s announcement. The shares are currently trading at their highest level in more than 14 years.
Adani has acquired a little-known Indian company that lent 4 billion rupees ($50 million) to NDTV’s founders more than a decade ago in exchange for warrants that allowed the company to acquire a stake of just over 29% in the news group at any time.
Adani Group said last week it had exercised those rights, which NDTV said was done without its consent, and by doing so crossed a threshold mandating it to make a tender offer to NDTV’s shareholders to acquire a majority stake.
NDTV said, however, that tax authorities were reviewing whether the loans gave rise to a capital gains tax obligation, which effectively would put Adani’s bid on hold.
In its statement, Adani group said the tax review concerned only Roys’ investment company and did not prevent the founders from selling their stake, calling on them to process the deal “without any further delay”.
India’s tax authorities did not immediately respond to requests for comment.
Both sides have also separately asked the market regulator whether the Roys were allowed to sell their stake in the network given they were previously prohibited from dealing in India’s securities market following an insider trading case.
NDTV is regarded by some as one of the few independent voices in India’s rapidly polarising media landscape, and the takeover attempt has triggered concerns among journalists and politicians that a change of ownership could undermine its editorial integrity.
(Reporting by Abhirup Roy in Mumbai; Additional reporting by Nishit Navin; Editing by Ana Nicolaci da Costa, Bradley Perrett and Tomasz Janowski)