Adani’s NDTV bid raises media freedom concerns
TAKEOVER ATTEMPT OPPOSED BY FOUNDERS AS DISPUTE LIKELY TO END UP IN COURT
INDIA’S Adani Group last Friday (26) contested claims by New Delhi Television (NDTV) that regulatory curbs restricted its founders from selling their stake, prolonging the battle for the news network.
The takeover bid, which was launched by a group led by Asia’s richest man, Gautam Adani, has fanned concerns over editorial integrity at NDTV.
NDTV last Thursday (25) sought to block Adani’s move by saying its founders Prannoy and Radhika Roy have, since 2020, been barred by India’s market regulator from buying or selling shares in India’s securities market, and so could not transfer the shares the group was trying to secure.
But Adani said in a statement last Friday that the NDTV founders’ arguments were “baseless, legally untenable”.
It said the founders’ investment entity was not part of any regulatory restrictions and was “bound to immediately perform its obligation and allot the equity shares” to the conglomerate.
“Two sides are clearly at loggerheads now and might have to go to the regulator or courts for relief,” said Sumit Agrawal, founder of Indian law firm Regstreet Law Advisors and a former official of India’s market regulator.
Shares in NDTV rose to the maximum permitted limit of five per cent in morning trade last Friday, marking their third straight day of gains after Adani showed its hand. The shares are currently trading at their highest level in around 14 years.
Adani is trying to execute the takeover through a little-known Indian company called Vishvapradhan Commercial Private Ltd (VCPL). It gave `4 billion (£42.9 million) in loans to NDTV’s founders more than a decade ago in exchange for warrants that allowed it to buy a stake in the news group at any time.
The conglomerate said last Tuesday (23) that it had acquired VCPL and exercised those rights for a 29.18 per cent stake in NDTV. Separately, it added it would make an open offer for another 26 per cent stake for up to $62m (£53m). The news network said it was blindsided by Adani’s move.
NDTV and the country’s market regulator did not immediately respond to requests for comment.
The company maintains that a 2020 regulatory order prohibits the Roys from trading in the Indian markets until November 26, 2022, after an investigation found they made wrongful gains linked to suspected insider trading of NDTV shares.
Its two channels, one in Hindi and one in English, stand out among India’s myriad rolling news broadcasters for inviting on critics of the government. It has already been hit by a slew of legal cases that its owners said were a result of its reporting.
Last Wednesday (24), an employee at NDTV said there was a “general sense of shock and disbelief” in the newsroom following Adani’s announcement.
“We only found out from other news flashes and channels about the takeover and then all hell broke loose,” the employee said, asking to remain anonymous.
Self-made billionaire Adani, 60, became
the world’s third-richest person on the Bloomberg Billionaires Index on Tuesday, the first time an Asian has ranked in the top three (see related story, page 17).
Earlier this year, he also overtook fellow Indian Mukesh Ambani to become Asia’s richest man, with a net worth of $139 billion (£119bn) according to Forbes, behind Jeff Bezos and ahead of Bill Gates.
Ambani’s wealth and influence have also grown under prime minister Narendra Modi’s government. He now owns more than 70 media outlets that are followed by at least 800 million Indians, according to Reporters Without Borders. This includes a majority stake in Network18, one of the biggest media conglomerates in the country, which owns several leading broadcasters.
Hartosh Singh Bal, journalist at Caravan magazine – a rare critical voice among print media – said the takeover could bring the curtain down on “the only channel left that could be called partly independent”.
“The government influence on the media is growing. The control of what I call oligarchs – the Adanis and the Ambanis – is also growing and it will keep on growing,” he said. “This (takeover) means there is almost no independent media left and that shrinking space is extremely dangerous.”
Geeta Seshu, founder of the Free Speech Collective, an independent organisation that advocates press freedom, added that in India, “the space for independent journalism has shrunk alarmingly over the last few years”.