Income tax authorities must approve the takeover of the Adani Group: NDTV
According to New Delhi Television Ltd. (NDTV), Adani group’s attempt to take control of the popular news network will now face an additional obstacle as the sale of a sizable stake by the company’s founders to the group will need to be approved by the Indian tax authorities.
Prannoy and Radhika Roy, the company’s founders, were provisionally prohibited from selling a portion of their stake in 2017 as a result of a reassessment of their taxes, according to NDTV’s exchange filing late on Wednesday. After Gautam Adani’s conglomerate, which controls a majority stake in the news network regarded as a bulwark of independent media, last week unveiled plans to do so, NDTV and Adani have publicly sparred.
By acquiring a little-known Indian company that gave NDTV’s founders a loan for $4 billion ($50 million) over ten years ago in exchange for warrants that allowed the company to purchase a stake in the news organisation at any time, Adani has attempted to carry out the takeover plan. Adani Group claimed last week that it had used those rights, according to NDTV, without its permission.
According to claims that the loans amounted to a transfer of the controlling interest in the network, NDTV reported on Wednesday that tax authorities were already investigating whether the loans gave rise to an estimated capital gains tax of $1.75 billion. NDTV said, the company from the Adani group had been invited to join its request for clarification from the tax authorities. Attempts to reach the Adani group and India’s tax authorities for comment were not immediately fruitful.
The takeover attempt has raised concerns among journalists and politicians that a change in ownership could erode the editorial integrity of NDTV, which is considered by some to be one of the few independent voices in India’s rapidly polarising media environment.
On August 23, Adani Group, led by billionaire Gautam Adani, launched a multi-layered transaction to acquire a 55% stake in NDTV. This was interpreted as a hostile takeover bid because the news media company responded immediately with a stock exchange notice stating that the move was made without its consent. In its notice to NDTV on Tuesday, Adani Group also requested that the firm transfer all of its stake “within two days.”
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