A fund of SAIF Partners has moved the National Company Law Tribunal (NCLT) with a contempt case against venture capitalist Srini Raju and others, accusing them of selling TV9 and violating interim orders of the tribunal.
After a complaint from SAIF Partners, the Tribunal had on September 4 last year passed an order restraining Associated Broadcasting Company (ABCL), the operator of the TV9 bouquet of satellite television channels, from selling its shares or assets until further directive from the bankruptcy court.
While a senior official at ABCL refused to comment on the allegations of SAIF Partners as the matter is pending before a court, Raju denied any wrongdoing or violation of interim orders, claiming that he had completed the stake sale before the bankruptcy court passed the interim orders.
SAIF Partners wanted to block the deal wherein Raju and his associates, who had then controlled ABCL with an 82% stake, agreed to sell their entire holding in favour of a consortium of two Hyderabad based infrastructure groups for around Rs 460 crore.
SAIF III Mauritius Company claimed that the funds it invested 10 years ago in IVision Media, another firm controlled by Srini Raju, were given to ABCL as interest-free loans without its consent and as part of a ploy to siphon off the money. IVision Media was to take up a collection of news content for distribution to print media, TV and radio channels, Internet portals and others.
Having invested Rs 50.37 crore for an 80% stake in IVision Media in August 2008, SAIF claimed it was assured that IVision Media would be merged with ABCL and that it would get a 14.29% stake in the merged entity.
Further, claiming that Raju and associates had agreed to provide an exit option if the merger wasn’t completed within 24 months, the Mauritius fund said neither the proposed merger went through nor did IVision Media’s business take off.
Despite repeated notices seeking an exit from IVision Media at Rs 90.08 crore, neither the contractual obligations nor its exit rights were honoured, the fund had told the tribunal, while seeking to block the sale of ABCL through restraining orders.
Source: Economic Times