SEBI bars NDTV promoters from accessing securities markets for two years
MUMBAI: The Securities and Exchange Board of India (SEBI) has barred NDTV promoters RRPR Holdings Pvt. Ltd., Prannoy Roy, and Radhika Roy from accessing the securities market for two years.
It also clarified that during the said period of restraint/prohibition, the existing holding, including units of mutual funds, of the three will remain frozen.
Further, the securities market regulator has also restrained Prannoy Roy and Radhika Roy from holding or occupying position as Director or any key managerial personnel in NDTV for a period of two years and in any other listed company for a period of one year.
The directions, which have come into force with immediate effect, were issued following a complaint filed by Quantum Securities, a shareholder of NDTV.
The SEBI had received complaints from Quantum Securities alleging that RRPR Holdings, Dr. Prannoy Roy and Radhika Roy have violated the provisions of Securities and Exchange Board of India Act, 1992 by omitting to disclose material information to the shareholders of NDTV about loan agreements entered into by them with Vishvapradhan Commercial Private Limited (VCPL).
Based on the complaints, an investigation was conducted by SEBI into the matter. The period of investigation was from 14th October, 2008 to 22nd November, 2017. The aggregate promoters’ shareholding in NDTV was 63.17% at the end of quarter ending on June, 2009.
SEBI in its investigation found that a corporate rupee term loan facility agreement was entered into between RRPR Holdings and ICICI Bank on 14th October, 2008 and an amended agreement, for pre-payment of the aforementioned loan, was entered into between the promoters and ICICI on 6th August, 2009.
The investigation further found that a loan of Rs. 350 crore was taken by the RRPR Holdings from VCPL for which a loan agreement dated 21st July, 2009 was entered into between the two to repay loan taken by RRPR Holdings from ICICI.
In its order, SEBI noted that the two agreements were not in public domain and the said information was alleged to have been concealed by RRPR Holdings, Prannoy Roy, and Radhika Roy from the public shareholders of NDTV.
The SEBI also stated that the Roys transferred/received shares of NDTV to/from RRPR Holdings in off-market transactions while having knowledge of the said agreements and its covenants pertaining to NDTV.
According to SEBI, in the absence of material information relating to ICICI and VCPL loan agreements in public domain, investors were not in a position to take an informed decision with respect to dealing in the scrip of NDTV.
“Therefore, by concealing such material information from the public shareholders while the promoters themselves continued to deal in shares of the company in off market, Noticees were alleged to have committed fraud on the minority public shareholders of the company,” the SEBI order stated.