Adani Group on Friday contested claims by New Delhi Television that regulatory curbs restricted its founders from selling their stake, prolonging the battle for control of a news network seen as bastion of independent media.
The takeover bid launched by a group led by Asia's richest man, Gautam Adani, has fanned concerns over editorial integrity at NDTV.
NDTV on Thursday sought to block Adani's move by saying its founders Prannoy and Radhika Roy have since 2020 been barred by India's market regulator from buying or selling shares in India's securities market, and so can't transfer the shares Adani is trying to secure.
But Adani said in a statement on Friday that the NDTV founders' arguments were "baseless, legally untenable".
It said the founders' investment entity was not part of any regulatory restrictions and was "bound to immediately perform its obligation and allot the equity shares" to the conglomerate.
"Two sides are clearly at loggerheads now and might have to go to the regulator or courts for relief," said Sumit Agrawal, founder of Indian law firm Regstreet Law Advisors and a former official of India's market regulator.
Shares in NDTV rose to the maximum permitted limit of 5% in morning trade on Friday, marking their third straight day of gains after Adani showed its hand. The shares are currently trading at their highest level in around 14 years.
Adani is trying to execute the takeover through a little-known Indian company Vishvapradhan Commercial Private Ltd.
VCPL gave 4 billion rupees ($50 million) in loans to NDTV's founders more than a decade ago in exchange for warrants that allowed it to buy a stake in the news group at any time.
The conglomerate said on Aug. 23 it had acquired VCPL and exercised those rights for a 29.18% stake. Separately, it added it would make an open offer for another 26% stake for up to $62 million. The news network said it was blindsided by Adani's move.
NDTV and the market regulator did not immediately respond to requests for comment.
NDTV maintains a 2020 regulatory order prohibits the Roys from trading in Indian markets until Nov. 26, 2022, after an investigation found they made wrongful gains linked to suspected insider trading of NDTV shares.