Capital markets regulator Securities and Exchange Board of India (SEBI) has approached the Supreme Court against media house New Delhi Television Limited (NDTV) and its founder- promoters Dr Prannoy Roy and Radhika Roy and the promoter entity RRPR Holding Private Limited. The SEBI has approached the top court against a Securities Appellate Tribunal (SAT) order which discovered that the Roys and RRPR Holding did not engage in an indirect transfer of control of the media house via loan arrangements with Vishwapradhan Commercial Private Limited (VCPL) in 2009-10.
Citing the penalties as “high, execessive and disproportionate”, the SAT reduced penalties levied by the SEBI on NDTV, Dr Prannoy Roy, Radhika Roy and RRPR Holding from Rs 25 crore to Rs 5 crore in a case of non-disclosure of a loan agreement. The tribunal also slashed the fine levied on NDTV from Rs 5 crore to Rs 10 lakh for failing to disclose loan agreements with VCPL.
SAT said in its order accessed by news agency PTI, “The combined reading of the agreement, call option agreements, warrant conversion option and the purchase option does not in any way lead to a conclusion of VCPL acquiring indirect control over NDTV. Thus the direction to VCPL to make an open offer in terms of… SAST Regulations… does not arise.”
The order further read, “The finding that the concealment of the loan agreement which gave de facto control to VCPL was concealed from the shareholders and, therefore, such arrangement deployed by the appellants to transfer their substantial stake in NDTV was fraudulent and was violative of the PFUTP Regulations also cannot survive since we have already held that there was no direct or indirect control over NDTV by VCPL.”
The tribunal had also set aside a June 2018 SEBI order that directed VCPL to make an open offer to NDTV shareholders. At the time, the SEBI directed VCPL to make an open offer. In the same period next year, SEBI restricted the Roys from accessing securities market for a period of two years and also barred them from holding or occupying any position as director or key managerial personnel in NDTV for two years or in any other listed company for a year.
The SEBI had levied fines worth around Rs 25 crore on the Roys and RRPR Holding in December 2020. Apart from this, the markets regulator also levied a penalty of Rs 1 crore each on Dr Prannoy Roy and Radhika Roy.
On August 23 2022, ports-to-power conglomerate Adani Group announced the acquisition of a 29.18 per cent stake in NDTV via the acquisition of VCPL, which has a 99.99 per cent stake in RRPR Holding.
(With agency inputs)
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