MUMBAI: Prannoy Roy-promoted media company New Delhi Television (NDTV) has filed a fresh application against a minority shareholder, Quantum Securities Limited (QSL) in the Bombay High Court, after QSL ran a newspaper advertisement accusing NDTV of not disclosing vital facts during a presentation to fund managers, equity brokers and investors by the company.
Quantum owns 0.22 per cent in the group. According to the advertisement published in the Economic Times, QSL said the company, in its presentation, did not reveal certain facts that included the income tax departments’ demand of Rs 492 crore tax dues for the annual year 2009-10.
“Sum of parts of NDTV group assets is not reflected in the market cap of NDTV. This is particularly true for the value of its digital assets.” It further said, the network had made no mention of the notice served to NDTV and its promoters by the department and a pending adjudication with the Income Tax Appellate Tribunal (ITAT).
The ad further highlighted that the issues relating to the Company Petition for Reduction of Capital filed by NDTV in Delhi High Court was also not mentioned. It quotes from an affidavit filed by the department "there are serious allegations of round-tripping for evasion of taxes in the case of the petitioner company for the annual years 2010-11 and 2011-12, being investigated."
The income tax department also objected to the decision of NDTV Board relating to NDTV Convergence and stated that the petitioner company (NDTV) has not disclosed material facts while seeking approval of capital reduction. This establishes that the applicant company (NDTV) has not approached with clean hands. This capital reduction has been proposed with malafide intention of defrauding revenue of its legitimate tax dues.
Additionally, the ad said the presentation did not mention that NDTV Convergence had filed a charge to the Registrar of Companies, New Delhi that hypothecated all movable and immovable assets to YES Bank.
In response to QSL's ad, NDTV clarified to the National Stock Exchange (NSE) that the allegations were baseless as it had made all announcements on the proceedings (in the ITAT and the Delhi High Court) to the exchanges as required by law and also included those in the annual report of the company.
“The allegations and insinuations and statements made by QSL in the said announcement are completely false, vexatious and have no basis in law or in fact. The announcement places selective material before the public at large and makes false and baseless allegations against the Company,” NDTV said in the notice.
“The Company submits that the allegations made by the QSL in the Announcement are completely baseless as the Company has in fact made all necessary announcements in relation to the proceedings to the stock exchanges as required by law. Further, the necessary disclosures in relation to the same have also been made in the Annual Report of the Company,” the statement added.
The notice by NDTV further highlighted the fact that QSL director Sanjay Dutt and his related companies have been investigated for market manipulation by capital markets regulator Securities and Exchange Board of India.
Further it said, “At the outset we state that the Announcement is in flagrant violation of the injunction passed by the Hon'ble Bombay High Court against inter-alia QSL and its directors including one Sanjay Dutt.”
On 27 June 2013, the company sent a legal notice to Quantum Securities, Dutt and directors of the company, through its law firm Amarchand Mangaldas accusing him of making defamatory statements, writing to various regulators and ‘launching a tirade’ against NDTV because he bears a ‘grudge’ against the broadcaster. Dutt was a consultant to NDTV from 2006-08.
The court had granted relief to NDTV by its orders dated 6 and 13 August and 13 and 17 October 2013, in terms of which QSL and its directors were restrained from issuing any defamatory letters, notices, emails, etc.
