Tuesday, 4 October, 2022
HomeJudiciarySC directs SEBI to respond to pleas of NDTV promoters Prannoy, Radhika...

SC directs SEBI to respond to pleas of NDTV promoters Prannoy, Radhika Roy

The apex court took note of SEBI's statement that they will not take any coercive action against the promoters in the meantime & response to their pleas may be filed in two weeks.

Text Size:

New Delhi: The Supreme Court Friday asked markets regulator Sebi to file its response to pleas of NDTV promoters Prannoy Roy and Radhika Roy that the penalty proceedings against them, related to alleged violation of securities norms by concealing information from shareholders on some loan agreements, be kept in abeyance.

The Roys have sought that the Sebi order imposing the penalty be kept in abeyance till Securities Appellate Tribunal (SAT) decides their appeals.

A bench headed by Chief Justice N V Ramana took note of the statement of Solicitor General Tushar Mehta, appearing for Sebi, that the market regulator will not take any coercive action against the promoters in the meantime and said that a response to their pleas may be filed in two weeks.

Senior advocate Mukul Rohatgi, appearing for the Roys, said that the third member of theT is not there and hence the hearing on the appeals is stuck.

The problem is that now the proceedings to levy the penalty have been initiated, he said, adding that my appeals have to be decided without charging the penalty at this stage.

This is a misleading petition. Penalty proceedings are different. This is an MA (miscellaneous application) filed in a disposed of matter…it’s a question of law, Mehta said on behalf of Sebi and added that the hearing may not take more than 15 minutes.

You want to initiate penalty proceedings without deciding the main issue… We are not saying that you will not be given an opportunity to be heard… We will hear it in a day and decide, the bench said.

On August 27, the top court had adjourned the hearing at the submissions of Sebi and had suggested the market regulator not to take any coercive action against NDTV promoters.

The apex court on February 15 disposed of the pleas of the Roys asking theT not to insist on deposit of half the amount of fines as a pre-condition for hearing their appeals against the Sebi orders.

The NDTV promoters challenged theT order directing them to deposit 50 per cent of the alleged unlawful gains which Sebi found to have been made by them.

Having heard the matter for some time, we pass the following order by consent: The appellants’ Appeal nos…shall be heard by theT at Mumbai without insisting on any deposit of amount… It is directed that no amount shall be recovered coercively from the appellants in the absence of any deposit. This order shall not be treated as a precedent in any other case. The appeals are, accordingly, disposed of, the top court had ordered.

The Solicitor General had said the deposit of money is a condition precedent for grant of stay on the direction of Sebi.

TheT had directed the NDTV promoters to deposit 50 per cent of the disgorged amount before Sebi which had imposed a penalty on them for alleged violation of various securities norms by concealing information from shareholders regarding certain loan agreements.

While hearing their appeal against Sebi,T had further said that if NDTV were to deposit the amount, the balance would not be recovered during the pendency of the appeal before it.

In two separate orders passed on January 4, the tribunal had noted that the appeals filed by the Roys needed consideration and directed they be listed before the tribunal for final disposal on February 10, 2021.

This had come following appeals filed by the couple against a Sebi order passed in November last year, whereby the markets regulator had barred them from the securities market for two years and also directed them to disgorge illegal gains of Rs 16.97 crore for indulging in insider trading more than 12 years ago.

However, the charges were denied by the company. Sebi had noted that the duo together made the gains by indulging in insider trading in the shares of New Delhi Television Ltd (NDTV) while in possession of UPSI relating to the proposed reorganization of the company.

Prannoy Roy was the chairman and whole time director and Radhika Roy was the managing director during the period under investigation and were part of the decision making chain that had led to crystallization of the UPSI.

Discussions pertaining to reorganisation of the company started on September 7, 2007 and the disclosure was made on April 16, 2008.

Hence, September 7, 2007 to April 16, 2008 was an unpublished price sensitive information (UPSI) period.

The couple sold shares on April 17, 2008, when the trading window for them was closed and made a profit of Rs 16.97 crore, as per the Sebi order.

By doing so, they violated Prohibition of Insider Trading (PIT) norms and also acted in contravention of NDTV’s code of conduct for prevention of insider trading which prohibited them from trading at least till 24 hours after the information was disclosed to the stock exchanges, it added.

Also read: Don’t take coercive steps against NDTV promoters till their pleas are heard: SC to SEBI


Subscribe to our channels on YouTube & Telegram

Support Our Journalism

India needs fair, non-hyphenated and questioning journalism, packed with on-ground reporting. ThePrint – with exceptional reporters, columnists and editors – is doing just that.

Sustaining this needs support from wonderful readers like you.

Whether you live in India or overseas, you can take a paid subscription by clicking here.

Support Our Journalism

Most Popular