In December 2020, the Securities and Exchange Board of India (Sebi) had imposed a penalty of ₹25 crore on NDTV's promoters for alleged violation of non-disclosure of the loan agreement entered by them.
SAT, setting aside the Sebi directional order, had reduced the penalty to ₹5 crore since the tribunal felt the penalty was “excessive" in nature.
The Roys are now challenging this SAT penalty order in the top court, NDTV informed the stock exchanges.
While passing the order in December 2020, Sebi had said that the non-disclosed loan agreements had some clauses that had an adversarial effect on NDTV shareholders.
A complaint was filed with the regulator in 2017 by Quantum Securities Pvt Ltd, an NDTV stakeholder. The loan arrangements with Vishvapradhan Commercial Private Ltd (VCPL), was the subject of the dispute.
Prannoy Roy, Radhika Roy and RRPR Holdings had failed to disclose material information to the shareholders of NDTV regarding the loan agreement entered with VCPL and, consequently, violated Sebi norms, the markets regulator had then said.
According to the Sebi order, a loan agreement for ₹350 crore was struck with VCPL in 2009 to pay back a loan taken by NDTV from ICICI Bank, and a second loan agreement for ₹53.85 crore was signed with VCPL in January 2010. The markets regulator said that certain provisions in these loan arrangements had a significant impact on NDTV's ability to operate.
Sebi had said, “Upon a scrutiny of various clauses of the loan agreement, the promoters had effectively transferred 30% of the shares of NDTV to VCPL and that the transactions have been deliberately structured as a loan transaction so as to conceal the said sale of 30% stake in NDTV".
According to the order , the regulator also found that the loan agreement structure was material and very sensitive information which was concealed from the minority shareholders, thereby inducing investors to trade in the shares of NDTV in ignorance regarding de facto control over NDTV by VCPL and, therefore such transaction has been made under the Prohibition of the Fraudulent & Unfair Trade Practises (PFUTP) Regulations.
Meanwhile, in a surprise move on 23 August, the Adani group indirectly acquired a 29.18% stake in the broadcaster by purchasing VCPL, which owned convertible debentures in RRPR. The group also offered to buy 26% more from the open market, as mandated by law. NDTV is yet to transfer the ownership of these shares to Adani group.
