RRPR Doesn't Need Warrant Conversion: IT Dept On NDTV Conversion

Visvapradhan Commercial (VCPL), an indirect subsidiary of Adani Enterprises says that NDTV promoter group firm RRPR Holding will not require Income Tax Department’s nod to convert warrants into equity shares.

On August 23, VCPL notified RRPR Holding that it was exercising its rights to convert warrants issued to it in 2009 into equity shares, which would give it control of 99.5 per cent of RRPR Holding.

RRPR then states that it would need the Income Tax Department’s nod to convert the warrants, which was 29.18 per cent. Adani Enterprises rejected this stating that its claims are not merited or law based and that it was misconceived on its part.

In a notification issued by VCPL on Friday, it said that it had approached the Income Tax Department for clarity on the matter and the department said that there were no restrictions on RRPR to carry out the exercise of warrants into equity.

“The prohibition under orders u/s 281B during the period of their operation is on M/s. RRPR Holding Private Limited for selling or transfer of its shareholding in M/s. New Delhi Television Limited and from creating/causing any charge only, irrespective of the shareholding pattern of M/s. RRPR Holding Private Limited exercises control thereon and not on the issuance of shares of M/s. RRPR Holding Private Limited,” the reply from the Additional Commissioner of Income Tax states.

The company explains that the IT Orders are only applicable to the NDTV shares held by RRPR. This would not restrict the firm (RRPR) from completing the formalities of allotting equity shares to VCPL on the exercise of the warrants.