Mumbai: India's stock market regulator is looking closely at the plan of Reliance Industries Ltd? (RIL) to offload part of its stake in the ETV channels of the Eenadu Group to the Network18 Group, as the country's most valuable company may not have made adequate disclosures about the holdings.
The Securities and Exchange Board of India (Sebi) is examining RIL's financial statements and reports to check whether the acquisition of significant stakes in ETV channels was disclosed to either the regulator or the stock exchanges.
An email sent to Sebi did not elicit any response. An RIL spokesperson declined to comment on the matter.
The ETV stake sake is part of a transaction that involves an independent trust set up by RIL funding the purchase by Raghav Bahl's Network18 Group through subscription to rights offers.
According to Sebi's listing agreement norms, a company has to immediately inform the stock exchange of all the events that are material- and price-sensitive.
The regulator's rules mandate that the company has to disclose any event or transaction that occurred during or before the quarter that is material to an understanding of the results for the quarter including, but not limited to, completion of expansion and diversification programmes, strikes and lock-outs, a change in management and a change in capital structure.
As a part of the deal, RIL's subsidiary Infotel Broadband Services Ltd has entered into a memorandum of understanding with TV18 and Network18 Media and Investments Ltd (Network18) for preferential access to all their content for distribution through the fourth-generation broadband network being set up by Infotel.
Network18 and TV18 have announced that both the companies are raising funds for the acquisition of the ETV channels through a rights issue, to be funded by the independent media trust, set up by RIL.