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SAT stays Sebi ban on NDTV’s Roys, next hearing on Sept 16

Sebi had alleged that the promoters of NDTV entered into three loan agreements.

ET Bureau|
Updated: Jun 19, 2019, 07.53 AM IST
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Mumbai: The Securities Appellate Tribunal late on Tuesday stayed last week’s regulatory order that had barred Prannoy Roy and Radhika Roy, executive leaders at New Delhi Television (NDTV), and their holding company from the capital markets for two years. It also stayed the ruling that required the Roys to quit as directors of the listed broadcaster.

On Tuesday, a three-member division bench of the appellate tribunal stayed Friday’s Securities & Exchange Board of India (Sebi) order until September 16.

“At this stage, prime-facie, we are of the opinion that a listed company which is managed by the appellants holding more than 61 per cent of the total shares cannot remain headless,” said the tribunal in its eightpage ruling. “The impugned order has been passed restraining the appellants, Prannoy Roy and Radhika Roy, from occupying a position as a director or key managerial personnel in NDTV for a period of two years. Such orders prima facie would not be in the interest of the shareholders of NDTV, or for that matter the investors at this stage.”

On Friday, Sebi had ordered the curbs as the Roys allegedly didn’t disclose material and price-sensitive information on their loan agreements with ICICI Bank and Vishvapradhan Commercial Pvt Ltd (VCPL).

“We accordingly grant the respondent six weeks’ time to file a reply from today,” said the tribunal order. “(And) three weeks thereafter to the appellants to file a rejoinder. The matter would be listed for admission and for final disposal on September 16, 2019.”

Sebi had alleged that the promoters of NDTV entered into three loan agreements — one with ICICI Bank and two with VCPL. These agreements contained material and price-sensitive information, Sebi had said.

“Decisions on key company matters were subject to prior written consent from the lenders, something minority shareholders were ignorant of,” Sebi said in its order last week.

Separately, Sebi Tuesday imposed a penalty of Rs 12 lakh on NDTV for alleged disclosure lapses dating back more than a decade. The capital markets regulator said that NDTV failed to timely disclose two transactions that happened in 2008 – one involving a purchase made by Indiabulls Financial Services in NDTV stock, while the other involved acquisition of fresh stake by promoters.

In January 2008, Indiabulls Financial Services purchased 4 million shares, or 6.4 per cent of the broadcaster’s equity capital. The other transaction involved promoters of NDTV increasing their stake by more than 20 per cent through an open offer. These transactions are required to be disclosed immediately, but they were reportedly not disclosed until June 2017.

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