NCLT permits SAIF to withdraw contempt case against Srini Raju, associates

The National Company Law Tribunal (NCLT) on Friday permitted a fund of SAIF Partners to withdraw contempt case it filed against venture capitalist Srini Raju and associates involving the sale of Associated Broadcasting Company Ltd (ABCL), which owns TV9 bouquet of television channels.

The Tribunal, while observing that the SAIF fund had entered into a settlement agreement with Srini Raju and associates, has noted that none of the respondents raised objections to SAIF withdrawing contempt petition except minority shareholders led by TV9 former chief executive officer Ravi Prakash.

Earlier, 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.

Raju and associates recently offered a compromise to SAIF by agreeing to pay Rs 65 crore. Accordingly, the Mauritius fund informed the tribunal about its willingness to withdraw the contempt petition. Raju said the deal involved buying the entire stake of SAIF in IVision Media and providing SAIF an exit for about Rs 65 crore where the money was already paid.

The Tribunal at Hyderabad, while pointing out that Ravi Prakash had filed a similar petition alleging acts of oppression and mismanagement at ABCL the proceedings on which were stayed by the appellate tribunal, has dismissed his implead petition while allowing SAIF to withdraw its contempt petition.

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Alanda Media & Entertainments, a consortium of Hyderabad-based infrastructure groups, had bought 82% stake from Srini Raju in ABCL for around Rs 460 crore and subsequently bought another 8.54% from TV9 employees to take their total holding to 90.54%.

Minority shareholders led by Ravi Prakash had urged the Tribunal to stall Alanda Media’s acquisition of majority stake in ABCL citing the interim orders not to alienate shares or assets of ABCL that the Tribunal had passed to protect the interests of SAIF. Through implead petitions, the minority shareholders wanted to join SAIF that filed contempt petition against Srini Raju and associates, seeking to stall the sale of ABCL.

The Tribunal has observed that the objections raised by Ravi Prakash revolved mostly around the internal disputes at ABCL relating to the acts of Alanda Media and removal of Ravi Prakash and other directors from ABCL.

On Friday, the Tribunal while allowing SAIF to withdraw its contempt petition, also vacated the interim restraining orders that it had issued on the sale of ABCL shares and assets.


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