Minority shareholders, led by former TV9 chief executive officer Ravi Prakash, have moved the National Company Law Tribunal (NCLT) alleging that the company’s majority shareholders had violated its restraining orders.
The minority shareholders, who together claim to hold a 9.43% stake in TV9, sought to set aside the sale of the company and block the appointment of four nominees of the new majority owners to the board, claiming such acts violated the tribunal’s orders. Alleging oppression and mismanagement, the minority shareholders, including directors MKVN Murthy and Clifford Pereira, urged the tribunal to stop the director-nominees of the majority shareholders from conducting board and shareholder meetings and from infusing fresh capital. The tribunal had passed an order on September 4 restraining Associated Broadcasting Company, the operator of the TV9 bouquet of channels, from selling shares or assets while responding to a petition by a fund of SAIF Partners.
SAIF III Mauritius Company had moved NCLT to prevent the sale of TV9 by its majority stakeholder and venture capitalist Srini Raju and his associates. It claimed that the funds it had invested 10 years ago in IVision Media, a firm controlled by Srini Raju, were given to ABCL as inter-corporate deposits to help siphon off the money.
The Mauritius fund claimed that it had invested ₹50.37 crore for an 80% stake in IVision Media in August 2008 after an assurance that IVision Media would be merged into ABCL, giving it 14.29% stake in the combined entity. Neither did the merger take place nor was SAIF provided an exit route.
Last month, SAIF moved the tribunal with a contempt case against Raju and associates, accusing them of selling TV9 in violation of restraining orders. Raju said the tribunal’s orders not to alienate shares and assets were directed at ABCL and not its shareholders.
Two Hyderabad-based infrastructure groups acquired 82% stake in the company from Raju and associates for about ₹460 crore and have nominated four of their representatives to the board.
The minority shareholders led by Prakash also moved the Ministry of Information & Broadcasting, alleging violations by the new shareholders, apart from oppression, mismanagement and wrongful and illegal intimidation tactics.
“There is no violation of restraining orders of the tribunal since Alanda Media signed the share purchase agreement on August 24 last year, much before the restraining orders were passed,” Srinivasa Rao Aravapalli, a spokesperson of Alanda Media and its nominee director on the ABCL board, told ET.
The minority shareholders claimed they were “coerced and pressured” by Raju and associates and Alanda Media into passing board resolutions approving the transfer of majority stake in favour of Alanda Media.
Raju and associates recently offered a compromise to SAIF by agreeing to pay ₹65 crore.
The Mauritius fund informed the tribunal about its willingness to withdraw the contempt petition. Raju said the deal involves buying the entire stake of SAIF in IVision Media and providing SAIF an exit for about ₹65 crore.
The tribunal, which heard the case on Monday, has reserved its judgement and posted the case for May 23.
