Network 18 sale: SAT tells Sebi to probe control issue
The Securities Appellate Tribunal on Wednesday asked Sebi to re-investigate whether Independent Media Trust, related to Reliance Industries, acquired control over Network 18 from Raghav Bahl even before inking the share purchase pact in 2014.
The tribunal gave the direction to Sebi while deciding on an appeal which alleged that the open offer price fixed by the acquirers of Network 18 was much less. In February 2012, an investment agreement was entered into between Independent Media Trust -- of which Mukesh Ambani-led Reliance Industries is the sole beneficiary -- and six holding companies of Raghav Bahl and the Bahl Group.
Under the pact, Independent Media Trust was to invest in the six holding companies by subscribing to Zero Coupon, Optionally and fully Convertible Debentures (ZOCD). Meanwhile, the Share Purchase Agreement between the parties was inked in May 2014.
“Perusal of various clauses contained in the ZOCD agreement... led us to believe, prima facie, that by executing ZOCD agreement on February 27, 2012 the Bahl group sought to divest its control over the six holding companies and consequently sought to divest control over target company and TV18 without receiving any consideration which is rather strange and unusual to say the least,” the tribunal said.