Directors Prannoy, Radhika Roy resign from NDTV's promoter company 'RRPR'
New Delhi Television (NDTV) founders Radhika Roy and Prannoy Roy have resigned as directors of the board of RRPR Holdings Private Limited (RRPRH) with immediate effect, the company said in a regulatory filing late on Tuesday. The couple hasn't stepped down from the NDTV board and Prannoy Roy continues to serve as its chairperson, while Radhika Roy is an executive director.
Why does this story matter?
- This comes as Adani Group has launched an open offer to acquire an additional 26% public shareholding in NDTV.
- The conglomerate indirectly acquired a 29.18% stake in NDTV in August.
- As per the Securities and Exchange Board of India (SEBI) Regulations, 2011, the acquirer must make an open offer to shareholders of the target company in order to provide them with an exit option.
Roys indirectly issued shares to Adani
Named after the couple, RRPRH is a promoter group entity of NDTV. The resignation followed a meeting on Tuesday, after which Sanjay Pugalia, Sudipta Bhattacharya, and Senthil Sinniah Chengalvarayan were appointed as new directors on the board. A day earlier, an entity backed by the Roys reportedly issued shares to a unit of Adani Group, taking the conglomerate a step closer to acquisition.
Who are the new directors on the board?
Pugalia, a veteran journalist, is the Chief Executive Officer (CEO) and editor-in-chief of Adani Enterprises Limited (AEL), the conglomerate's media entity. He was the president of Quint Digital Media Limited and the former editor-in-chief of CNBC Awaaz. Chengalvarayan was the founding editor of CNBC TV18 and the former editor-in-chief of Network18's business newsroom. Bhattacharya is Adani Group's Chief Technology Officer (CTO).
VCPL acquisition triggered Adani's offer
Vishvapradhan Commercial Private Limited (VCPL), which acquired a 99.5% equity stake in RRPRH in August, is a wholly owned subsidiary of AMG Media Networks Limited (AMNL), which in turn is a 100% subsidiary of AEL. This acquisition triggered Adani Group's open offer, which would take its total stake in NDTV to 55.18%. The Roys hold a 32.26% stake in NDTV.
How did this come about?
In 2009 and 2010, VCPL gave RRPRH an interest-free loan of Rs. 403.85 crore in lieu of warrants entitling the former to convert it into a 99.9% stake in RRPRH. To extend the loan, VCPL raised funds from Reliance Strategic Ventures of Mukesh Ambani's Reliance Industries Limited (RIL), which also owns Network18. In August, AMNL bought VCPL for Rs. 113.75 crore.
Acquisition without discussions, claimed Roys
The loan hadn't been repaid at the time. In a statement to the stock exchange, NDTV said VCPL served them notices "without any discussions with NDTV or its founder-promoters." VCPL acquiring RRPRH's 99.5% stake in turn gave Adani control of NDTV's 29.18% equity shares held by RRPRH. Lacking the required financial power, the Roys couldn't launch a counteroffer to stop Adani.
Here's the letter to the bourses
NDTV's promoter group vehicle RRPRH has approved Prannoy Roy & Radhika Roy's resignation.— ANI (@ANI) November 29, 2022
RRPRH has approved Sudipta Bhattacharya, Sanjay Pugalia & Senthil Sinniah Chengalvarayan as directors on Board with immediate effect. pic.twitter.com/ENEu3XDYXE