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Adani v. NDTV: Media concentration by the Hostile Takeover – Part I

The authors are Mohammad Atik Saiyed and Pooja Shukla, third year students at Gujarat National Law University.


In alignment with the ever-evolving societal structure holding corporate entities as the new core elements for value addition, humans raise questions, enhance desires, develop & flourish the ability of fulfillment, disagree, compromise, and seek solutions for maximizing utility & satisfaction. The foundational blemish is well highlighted when we perceive vision as reality, rather than a dynamic blend of reflection, perception & dimension, wherein humans are isolated in the mutually agreed deceptive rattrap with the belief about the reflective vision that what the politically and corporately concentrated media shows is what it is.

The perpetual obsession with controlling the voices of the media by corporate bodies continues, and unironically, Adani Enterprises Limited (AEL) announced a hostile takeover bid of 29.18% stake in New Delhi Television Ltd. (NDTV), India’s most credible media house & the only critical mainstream channel reasonably evaluative of the ruling government, by a wholly-owned subsidiary company namely AMNL (AMG Media Networks Limited). VCPL (Vishvapradhan Commercial Private Limited), a subsidiary of AMNL, executed its option to convert 1,990,000 warrants into 1,990,000 equity shares of RRPRH, accounting for 99.50% of RRPRH's equity securities on the contractual foundation of an unsecured loan of the year 2009.

Majority control of AMNL over the ‘Fourth Estate’

This acquisition's only foreseeable positive aspect is that the political command might agree to a capitalism bridled dialogue with the channel after assuming power in 2014. Paramountly, India’s 2022 World Press Freedom Index position has plummeted to 150 out of 180 nations, following the latest report issued by Reporters Without Borders (RSF), owing to the spectacular rapprochement between the Hindu nationalist & the prominent families dominating the media by exploiting regulatory flaws. Within the veil of ‘anti-national’ approaches, the State, in the quest for political power, always has & will constantly attempt to control by way of changes in ownership, financial and regulatory pressure, and negative publicity of reputable journalists.

In a society filled with diversities and disagreements, the ‘Fourth Estate’ of the state has to be protected from an undue concentration of ownership to ensure plurality and diversity of opinion for the welfare of all. Establishing the foundation and, the legal configuration in India for friendly corporate mergers and acquisitions is governed by Section 230-240 of the Companies Act 2013 (CA2013), Section 3-6 of the Competition Act 2002, read with SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. In alignment with the dipping investigative journalism, the AMNL aspires to gain majority control by making an open offer for a 26% stake from the public, in accordance with Regulation 3 of the Takeover Regulations, the hostile acquirer must make a public offer after acquiring 25% of the target's voting rights under Regulation 4. With this well-woven conspiracy exploiting the legislative loopholes turning into reality, the Adani Group will control 55% of the only free media holding prime significance in an arena relying on traditional television sources, pushing out valuable television journalists Radhika & Prannoy Roy - the promoters holding 32% stake in NDTV.

Press freedom as the foundation of a democratic structure against political & corporate dominance - Constitutionality & International Standards

“Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate to prefer the latter.” Freedom of speech can be considered as the core & constitutive feature of justice, constituting active citizenship by blending diversified perspectives and it has been guaranteed under Article 19 of the Indian Constitution with reasonable restrictions in Clause (2) of the article and this right has been constantly reiterated by the Indian Courts and further highlighted such freedom to be the foundation of the democratic structure. The media plays a dominant role in defining notional public perception, and editing the public sphere and fueling extremism from every end kills the idea of reasonableness, rational opinion, and free choice manipulating the social dilemmas in the favor of the dominating power, whether righteous or not is a dynamic question of disagreement.

In the international realm, Article 19 of the Universal Declaration of Human Rights (UDHR) safeguards the right to freedom of expression which has been granted legal authority as International Customary Law and the International Covenant on Civil and Political Rights (ICCPR) provides formal legal immunity for free speech. The multi-dimensional right also preserves the right of the listener to ‘seek and receive’, which excludes arbitrary state or corporate interferences that prohibit individuals from accessing news that others desire to share with them. There is an inherent existence of a positive obligation on the State to ensure diversity and pluralism from every political, social, and cultural group. In further constitutional interpretation, the apex court in Romesh Thappar v. the State of Madras declared the inclusion of freedom of the press in Article 19 as it constitutes the foundation of democracy. In the constitutional interpretation, the acts of undue concentration of media ownership by a such hostile takeover by the Adani Group lucidly violate the Constitution, International standards, and the Rule of Law.

The hostile takeover of NDTV from the prism of the established Law

In stark response to the AEL media release, NDTV declared by a statement that a 29% stake was acquired without consent, discussion, or notice making this a hostile acquisition. Unquestionably, the legitimacy of the takeover can be determined primarily on the basis of terms of the contractual agreement of the unsecured loan in 2009, which will aid in determining whether the warrants were convertible solely at the discretion of VCPL or discussion/notice/consent of RRPRH was required. Adding to the essence, the transfer of shares to VCPL didn’t take place as NDTV claims that SEBI approval is necessary for the acquirer because of the order in Prannoy Roy AAHPR6037K and Others in the WTM, SEBI, wherein, Prannoy & Radhika Roy were restrained from accessing securities market directly or indirectly till 26 November 2022 (2 Years). Expanding the prism of the legal issue, whether the transfer of RRPRH shares would be directed towards the indirect dealing of Roys or not becomes a substantive question of law.

Within the established legal framework, the hostile nature of the acquisition doesn’t exempt it from complying with the regulatory framework under the Competition Act and since the Adani Group, as per the annual report of the FY 2021-2022, holds assets worth 21,651.88 Crores - falling in the ambit of combinations defined in Section 5 (a)(ii)(A) of the Competition Act, which triggers Section 5 & 6 of the Act mandating AEL to apply for the open offer's permission from the Competition Commission of India (CCI).

With an eye toward rationally satisfying the said prism, specific application of the laws within the established framework to the questions at hand has to be ensured, in the light of protecting diversity & plurality from the political and corporate powers blended with proposed recommendations, has been dealt comprehensively by the authors in the second fragment of the analysis.

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