In a relief to NDTV promoters Prannoy Roy and Radhika Roy, the Supreme Court Monday directed Securities Appellate Tribunal (SAT) not to insist on deposit of half the amount of fines as a pre-condition for hearing their appeals against the orders of markets regulator Sebi.
The NDTV promoters have challenged the SAT order directing them to deposit 50 per cent of the alleged unlawful gains which the Securities and Exchange Board of India (Sebi) found to have been made by them.
A bench headed by Chief Justice S A Bobde said the appeals of the Roys will be be heard by the SAT without insisting on deposit.
“Appeals are to be heard on March 4. No amount shall be recovered coercively in absence of any deposit for hearing the appeals. The order shall not be treated as precedent,” said the bench which also comprised Justices A S Bopanna and V Ramasubramanian.
In the proceedings conducted through video conferencing, the bench was informed by Solicitor General Tushar Mehta that the deposit of money is a condition precedent for grant of stay on the direction of Sebi.
“I am not saying it’s pre-deposit (condition). They will attach my house,” said senior advocate Mukul Rohatgi, appearing for the promoters.
“No amount shall be coercively recovered from the appellant for hearing the case. This order shall not be a precedent,” the bench said.
Earlier, the bench had asked the NDTV promoters to give a statement on shares indicating the current market value which they would like to deposit as security with market regulator Sebi under the order of the SAT.
The Roys had told the apex court they were willing to give undertakings that their shares in NDTV will not be transferred.
The court had taken note of the submission of Rohatgi that the promoters were willing to provide a statement of shares and their current market value.
Rohatgi had said the promoters are willing to give an undertaking that shares which they hold in NDTV will not be transferred.
“We don’t have any other money. We are a struggling news channel. We are badly hit,” the senior lawyer said.
“You have to give some security. How much is the value of share,” the bench had asked.
The value of each share is Rs 37 and we have 50 lakh share, the lawyer replied and undertook to file the affidavit.
The SAT had directed the NDTV promoters to deposit 50 per cent of the disgorged amount before Sebi which had imposed a penalty on them for alleged violation of various securities norms by concealing information from shareholders regarding certain loan agreements.
While hearing their appeal against Sebi, SAT had further said that if NDTV were to deposit the amount, the balance would not be recovered during the pendency of the appeal before it.
In two separate orders passed on January 4, the tribunal had noted that the appeals filed by the Roy couple needed consideration and directed the appeals to be listed before the tribunal for final disposal on February 10, 2021.
This had come following appeals filed by the couple against a Sebi order passed in November last year, whereby the markets regulator had barred them from the securities market for two years and also directed them to disgorge illegal gains of Rs 16.97 crore for indulging in insider trading more than 12 years ago.
However, the charges were denied by the company. Sebi had noted that the duo together made the gains by indulging in insider trading in the shares of New Delhi Television Ltd (NDTV) while in possession of UPSI relating to the proposed reorganization of the company.
Prannoy Roy was the chairman and whole time director and Radhika Roy was the managing director during the period under investigation and were part of the decision making chain that had led to crystallization of the UPSI.
Discussions pertaining to reorganisation of the company started on September 7, 2007 and the disclosure was made on April 16, 2008.
Hence, September 7, 2007 to April 16, 2008 was unpublished price sensitive information (UPSI) period.
The couple sold shares on April 17, 2008, when the trading window for them was closed and made a profit of Rs 16.97 crore, as per the Sebi order.
By doing so, they violated Prohibition of Insider Trading (PIT) norms and also acted in contravention of NDTV”s code of conduct for prevention of insider trading which prohibited them from trading at least till 24 hours after the information was disclosed to the stock exchanges, it added.