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Prannoy Roy-promoted media company NDTV has filed a fresh application in an on-going contempt proceeding against Quantum Securities Ltd (QSL), a minority shareholder, in the Bombay High Court, after Quantum ran a newspaper advertisement accusing it of not disclosing vital facts in an October presentation to fund managers, equity brokers and investors in Mumbai.
Quantum controls 0.22 per cent in NDTV. The NDTV presentation, available on the company's website, was made to fund managers and potential investors. Sources close to the company reveal the presentation was made to investors after the board instructed the management to look at ways to maximise the potential of NDTV's verticals like Convergence, Lifestyle, etc.
In the advertisement, Quantum had said the company, in its presentation, had kept out key facts that included the income-tax department's demand of Rs 492 crore tax dues for the annual year 2009-10. Also, it 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 said issues relating to the Company Petition for Reduction of Capital filed by NDTV 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 ad said the presentation did not mention Convergence had filed a charge to the Registrar of Companies, New Delhi, that hypothecated all movable and immovable assets to YES Bank.
With hypothecation, the lender has the right to seize the asset if the borrower cannot service the loan as stipulated by the terms in the pact.
Sanjay Dutt, the director of QSL, was a consultant to NDTV from 2006-08.
In response to QSL's ad, NDTV clarified to the National Stock Exchange (NSE) 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 company added the court had granted relief to NDTV by its orders dated August 6 and 13 and October 17, 2013, in terms of which QSL and its directors were restrained from issuing any defamatory letters, notices, emails, etc.
NDTV said Dutt and his related companies have been investigated for market manipulation by capital markets regulator Securities and Exchange Board of India.
