NEW DELHI: Against the backdrop of a planned takeover of NDTV by Adani Media Works, a Securities and Appellate Tribunal (SAT) order of July 20, 2022 assumes significance.
Reacting the developments, NDTV's stock price was circling at Rs 388 on Wednesday. The SAT ruled that the loan agreement between the NDTV promoters and VCPL did not, either directly or indirectly, transfer control of NDTV to VCPL. As a result, the AO's conclusions that the loan deal is structured in a way that actually transfers control to VCPL indirectly cannot be upheld. The conclusions in this matter were disregarded.
According to SAT's July 20 order, the issue that has to be resolved is whether the minutes and their contents from the Board of Directors of NDTV's August 5, 2015 meeting were required to be released 83 under Clause 36 of the listing agreement.
Due to VCPL's de facto influence over the situation, the AO in this instance determined that the information pertaining to the loan arrangements was substantial and price sensitive. The Tribunal said, "On this brief ground, the determination that the contents of the loan agreements were price sensitive in nature cannot be upheld. We have already concluded that there was no de facto control of VCPL on NDTV.
"To the extent that the matter was discussed in the minutes of the Boards meeting on August 5, 2015, the said minutes should have been disclosed under Clause 36 of the listing agreement due to the peculiar structure of the loan agreement and the fact that the exercise of the warrant option or the call option, if invoked, would have an impact on the performance/operations of the company. By providing this information, shareholders and the general public would be better equipped to decide whether or not to invest in NDTV securities " SAT said.
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