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NDTV vs Quantum Securities: Bombay HC serves contempt notice on QSL director
MUMBAI: Following a fresh application by NDTV, the Bombay High Court has issued a contempt notice and a restraining order against Quantum Securities Ltd (QSL) and its director Sanjay Dutt for issuing and publishing defamatory content against the news broadcaster.
The issue cropped up after QSL had published an advertisement in The Economic Times on 30 October, asking all the stakeholders and investors of NDTV to take note of ‘facts and events that have not been disclosed’ by the media company during its presentations to the investor community from 13 to 14 October.
QSL, which is a minority shareholder of NDTV, said that NDTV in its presentation stated that ‘Sum of parts of NDTV group assets is not reflected in the market cap of NDTV’. However, it also added that many facts and events had not been disclosed in its presentation.
The advertisement listed five points that were not mentioned, including the fact that the income tax (I-T) department had raised a fresh demand of Rs 450 crore (Rs 4.50 billion) for the assessment year 2009–10. It also said that while NDTV’s market cap (as of 28 October) was Rs 748 crore (Rs 7.48 billion), its borrowings (as per annual report FY14) stood at Rs 170 crore (Rs 1.70 billion).
It also said that the I-T department had served a notice and there was pending adjudication with the Income Tax Appellate Tribunal (ITAT).
It further said that in course of the company petition for reduction of capital, the I-T department had stated that there were “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.”
Finally, referring to NDTV Convergence, the advert also said that this group company had registered a charge with the Registrar of Companies, New Delhi, which hypothecated all movable and immovable assets to YES Bank. QSL alleged that this fact was not mentioned in the presentation to the investors.
Incidentally, Dutt, the director of QSL, was a consultant to NDTV from 2006 to 2008.
In response to QSL’s ad, NDTV clarified to the stock exchanges that the allegations were baseless as it had made all announcements on the proceedings to the exchanges as required by law.
NDTV added that the court had granted relief to NDTV by its orders dated 6 and 13 August and 17 October 2013, according to which QSL and its directors were barred from issuing any defamatory letters, notices, emails, etc. against NDTV.
NDTV said that Dutt and his related companies had been investigated for market manipulation by capital market regulator Securities and Exchange Board of India.