Was NDTV really unaware of the Adani takeover?

NDTV & Adani Takeover !

KAKALI DAS

NDTV was seen as anti-establishment but now it will be acquired by money. Last week, Adani enterprises had announced that it has acquired stake of 29.18% in NDTV. The 4^th richest person, Gautam Adani’s group has made an open offer for another 26%, granting majority control over one of the last few channels that did critical reporting, criticised as anti-Modi and anti-government.

Acquisition of NDTV is not surprising as it was to come sooner or later. As a matter of fact, a rumour surfaced that Spicejet owner Ajay Singh, also close to the ruling party, was interested in NDTV stake. NDTV released a statement in September last year that they were not in discussion with any entity for a divestment of any sort. The selling point of NDTV was that it was a journalists driven organization with un-compromisable core principles.

Then, how come Adani acquired NDTV? They Roys (owners) said that they were not consulted. But the facts show that Roys sold stake knowingly and acting as if they did not see this coming. It’s evident that critical questions to the system, to the government will decrease from here on.

A lesson to learn is related to loan and its payment. Times of India, Times Now, ET Now are owned by Jains, who are conglomerates themselves. Mint is owned by Birla, Business Standard by Kotak, CNBC and Moneycontrol by Ambani, Bloomberg Quint recently acquired by Adani, and now NDTV too. Corporate owned media can easily be controlled.

Imagine how NDTV would now report in coming time! Prepare for the noise, ruckus that you will be witnessing in the name of broadcasting news. IT cell is tremendously happy. IT cell celebrated as if Ravish quit. They weren’t as happy as this even after election win. This is the level, when you cannot defeat someone on facts, intellect, now hoping for resignation when company is acquired. Memes of Ravish Kumar went viral on social media. But, if Ravish quits, who will IT cell troll from now onwards?

Ravish Kumar, in the meantime, clarified that he is not resigning. However, this news isn’t a shock to Ravish, as he commented long before in an interview that institutional journalism is dead. But people who do not track media and news are very surprised. Roys released a statement that the acquisition happened without consent. Although SuparnaSingh, president NDTV, told that VCPL had acquired 29% of Radhika Roy Prannoy Roy company shares.

Let’s understand what actually the entire matter is!

This acquisition has not happened overnight. It was in the making since a decade. In 2008, a management and consultancy services company VCPL (Vishvapradhan Commercial Private Limited) with no assets formed. The company gave loan of Rs403.85 crores to Radhika Roy Prannoy Roy (RRPR) holdings private limited, in 2009. RRPR had 29% shares, different from independent shares of Radhika and Prannoy. VCPL got the money from Shinano Retail Private Limited (SRPL). SRPL got the money from Reliance Industrial Investment and Holdings Ltd.

Security and Exchange Board of India (SEBI) show cause notice to Prannoy, Radhika Roy for not publicly announcing legal change of control. When 29% is leveraged, it should be declared that there has been a change in control. Prannoy Roy and Radhika Roy denied any wrongdoing.

On Tuesday, last week, AMG media networks of Adani enterprises bought 100% VCPL and NDTV shares in Rs113.74 croresas a result. Now NDTV founders are saying this happened without consent. NDTV said that the deal happened without consent, notice or discussion.

Did they not know the terms of loan agreement? It was reported in Caravan magazine, 2015, that VCPL could convert into 99% of share of RRPR at any time during tenure of loan. So, the amount of loan could be converted to shares without consent required. Now, founders act surprised.

NDTV took the loan and could not repay, so now, 29% stake is gone and now in Adani ownership. RRPR (29.18%) + individual (Radhika Roy’s 16.32% and Prannoy Roy’s 15.94%) shares equalled 61.45% ownership, of which RRPR is gone.

Now, after that acquisition, what is the next power play? Open offer. RRPR has to give its shares within 2 working days: open offer by Adani is for another 26%. But, now NDTV’s share price has climbed a little, Roys still control 32% of NDTV.

It’s clear that Adani won’t settle with minority stake and will aim for ownership. Other minority holders may have to give up shareholding. NDTV has been involved in tax related issues before, Roys either knew about the deal or misled. Now, this is the advantage. Why did it happen and for what reason?

But, one thing is clear – everything happened legally – ethical or unethical – it was legal. Now, there is an open offer for more stake; what will Roys do? Of remaining NDTV, LTS investment fund has 9.75% and Vikasa India fund has 4.42%. Both are Mauritius based companies. LTS has invested 20,000 crores in 13 Indian companies of which 98% is in Adani companies.

And, it’s clear that Adani is trying to enter media space. Before this, AMG media networks, the company of Adani bought 49% in RaghavBahl’s Quint at undisclosed amount.  So, it’s evident that one or two remaining critical voices are passing on to the hands of industrialists. Now, how will that impact their channel? Only time will tell.

But, why is Adani entering the media space when there is hardly any money? Probably, to counter Ambani’s television empire. Because, CNBC TV18 and NEWS 18 reach a lot of Indians. Television has a strong hold. A new platform can help Adani control its perception.

In a nutshell, two things are absolutely clear – Firstly, what Roys and NDTV say that they didn’t know, is wrong. The agreement was clear. The loan was taken to pay off. The loan amount couldn’t be recovered as shares. So, on paper, the company was sold a while ago. Secondly, corporate take-over of media is inevitable, as Ravish Kumar had said that institutional journalism is dead.

So, now it’s up to you to decide which media you are consuming. Which conglomerate owns the media you consume? Support independent print and digital media and small organisations because the authentic news will be carried by them.

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