The markets regulator Securities and Exchange Board of India (SEBI) imposed a 25 million rupee sanction on the controversial news outlet NDTV on Thursday and a 1 million rupee sanction on each of its promoters. SEBI has fined NDTV and its promoters Prannoy Roy and Radhika Roy for “violating various securities regulations” by hiding information from shareholders about certain loan agreements.
RRPR Holding, the promoter of New Delhi Television Ltd (NDTV), has reportedly been fined by SEBI after they withheld information about loan agreements that had clauses that had an adverse effect on NDTV shareholders.
In ordering the Roys to pay the fine for the violation, the SEBI said it began an investigation after receiving complaints from Quantum Securities Pvt Ltd, a shareholder of NDTV in 2017, about the violation of the rules for failing to disclose important information to the Roys. shareholders. about loan agreements with VCPL. One loan agreement was with ICICI Bank and two with Vishvapradhan Commercial Private Ltd (VCPL).
SEBI imposes a fine of 25 million rupees on NDTV and 1 million rupees each on Prannoy Roy and Radhika Roy. @SEBI_India @PrannoyRoyNDTV @ndtv #NDTV pic.twitter.com/FPdBRxAmIY
– Bar and bank (@barandbench) December 25, 2020
According to the regulator, the agreement was signed in 2009 with VCPL for a loan of 350 million rupees to repay the loan from ICICI Bank and a second loan agreement with VCPL was signed for 53.85 million rupees a year later. These loan contracts included clauses and conditions that substantially affected the operation of NDTV.
One of the terms of the loan agreements allowed VCPL to indirectly acquire 30 percent of the shares of NDTV through the conversion of warrants into shares of RRPR Holding.
The loan agreements were structured in such a way that clauses on matters related to NDTV, which contained price sensitive information, were hidden from minority shareholders.
Meanwhile, the promoters, Prannoy Roy and Radhika Roy, who are also accused of committing millions of tax fraud, have claimed that NDTV was not a party, so there was no requirement for them to disclose the deal to the stock exchanges. .
SEBI fines NDTV, here is the reason: Roys entered into loan agreements creating a conflict of interest, violated provisions
SEBI Adjudicating Officer Amit Pradhan said that he thought NDTV was not a party to these loan agreements, however the content and clauses of the loan agreement clearly demonstrate that the scheme was designed by the notices in such a way that although NDTV would not be a party to such loan agreements, however, the loan agreements would contain certain crucial, burdensome and hostile provisions relating to NDTV.
“Such provisions included the capital restructuring of NDTV, which was agreed to be carried out by Prannoy Roy and Radhika Roy, only with the prior consent of ICICI Bank / VCPL,” he added.
Through such acts, Prannoy Roy, Radhika Roy and RRPR Holding violated the provisions of the PFUTP (Prohibition of Fraudulent and Unfair Business Practices) rules, SEBI said in its order.
Defendants Roys had also entered into loan agreements that created a conflict of their personal interest with the interest of NDTV, however, they did not make the disclosure as required by the company’s code of conduct. They violated NDTV’s code of conduct and the provisions of the stock listing agreement.
“Consequently, a fine of Rs 25 million was imposed on Roys and RRPR Holding, which must be paid jointly and severally. In addition, a penalty of Rs 1 million has been imposed on each of Prannoy Roy and Radhika Roy, ”the SEBI said in its order.
NDTV promoters charged with ‘insider trading’
In November of this year, in another blow to the controversial media network NDTV, the Securities and Exchange Board of India (SEBI) had found its promoters Prannoy Roy and Radhika Roy guilty of improperly profiting from insider trading. As a penalty for the financial offense, SEBI has prohibited them from trading on the stock market for two years and ordered them to return the illegal gain of Rs 16.97 million that they had made from insider trading more than 12 years ago.
Apart from Pranoy Roy and Radhika Roy, former NDTV CEO Vikramaditya Chandra, Senior Advisor Ishwari Prasad Bajpai, Group CFO Saurav Banerjee have also been found guilty of insider trading.
According to an investigation conducted by SEBI, Pranoy Roy and his wife Radhika Roy have violated the Prohibition of Insider Information Trafficking (PIT) Regulations. They are accused of possessing unpublished price sensitive information (UPSI) during 2007-2008 in connection with the discussion on the reorganization of New Delhi Television Ltd.
NDTV accused of tax fraud, financial irregularities
The controversial far-left news channel NDTV has recently been embroiled in controversies over alleged financial wrongdoing. NDTV faces multiple cases related to violation of FDI rules, violation of income tax and non-compliance with disclosure rules. CBI is investigating a case against NDTV in relation to a loan of Rs 375 crore from ICICI Bank and the corresponding illicit loss of Rs 46 crore for the bank.
There is a chain of loans, repayments and loans in which Roys took a series of loans in 2008 as they sought to buy back a large chunk of NDTV’s stock from the market, allegedly violating foreign direct investment (FDI) rules on a 2007 investment. -09. , a charge denied by the company.
In August 2019, the founders of NDTV, Prannoy Roy, and his wife, Radhika Roy, were prevented from leaving the country after authorities suspected that the defendant Roys could flee the country amid massive accusations of tax fraud in her against.
