"Don't take coercive steps": CJI to Sebi, "We Won't": SEBI - In NDTV Promoters' appeal against order directing payment of penalty for insider trading
The Supreme Court on Friday asked SEBI not to take coercive steps against Prannoy & Radhika Roy, promoters of NDTV, who are under the scanner for insider trading.
Top Court hearing an appeal by the promoters, against an interim order of Securities Appellate Tribunal on January 4, 2021 directing NDTV to deposit 50 percent of the fine imposed earlier by the Securities and Exchange Board of India.
Bench led by Chief Justice NV Ramana took up the plea. Solicitor General of India Tushar Mehta appeared and informed Court that it was consented to, by NDTV that the same be taken up next week, Friday. Court then said that in that case, coercive steps may not be taken against the Roy's.
Senior Advocate Mukul Rohatgi also urged for the same.
Court will hear the plea next Friday now.
Last year, Sebi had barred the Roy's from the securities market for two years and had also directed them to make right, the illegal gains they had made of over Rs 16.97 crore from insider trading.
On March 28, the Top Court had stayed this order of Sebi.
It is pertinent to note that the Roy's had agreed to deposit shares at the rate of Rs. 37, as security in accordance with the SEBI order before Top Court.
A bench of then Chief Justice SA Bobde, AS Bopanna and V. Ramasubramaniun was informed by Senior Counsel Mukul Rohtagi, representing the Roy's, that NDTV is a struggling news channel with no other resources and the only guarantee it could provide were shares of the channel.
"My clients do not possess security or money and they cannot hand over shares without leave of the Tribunal"
- Rohatgi to Supreme Court.
CJI SA Bobde also inquired what what the value of the NDTV shares currently,
"This morning shares was trading at 37.35 on NSE and 37.25 on BSE. We can provide 50 lakh shares. Total would be around 18 crores." said the Counsel.
Litigious Chain
SEBI had imposed Rs. 27 crore penalty on the three NDTV promoters; Prannoy Roy, Radhika Roy and RRPR Holding Limited for insider trading. A Rs. 25 crore penalty was imposed jointly and severally on all three promoters, however, it was directed that Rs. 1 crore each be paid by Prannoy and Radhika Roy.
The appellate tribunal had agreed to hear the appeal filed by Roy's against the SEBI order on the condition that they deposit 50 percent of the stipulated amount within 4 weeks.
The Court, therefore, adjourned the matter for February 1 noting that Roy's have agreed to provide a statement of shares. They are expected to file an undertaking to this effect before the next date.
The SEBI order stated that the Roy's were in violation of Section 12A of the SEBI Act and the relevant rules of SEBI (Prohibition of Fraudulent Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations) on account of their failure to disclose information relating to three loan agreements with Vishvapradhan Commercial Private Limited (VCPL) and ICICI bank.
RRPR Holdings had entered into a loan agreement with ICICI in October 2008, and two others with VCPL in 2009 and 2010 for borrowing Rs. 350 crores and Rs. 50 crore respectively.
In June 2019, SEBI had barred the Roy's from accessing securities markets for two years on the same issue concerning the three contentious loan agreements. They were also restrained from holding or occupying positions as Director or any key managerial personnel in NDTV for a period of two years by the 2019 order.