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The Securities and Exchange Board of India (SEBI) today barred NDTV promoters Radhika Roy and Prannoy Roy from accessing securities markets for two years.
SEBI held that Roys acted fraudulently in a manner detrimental to the interests of NDTV and its shareholders by omitting to disclose material information to the shareholders about loan agreements entered into by them with Vishvapradhan Commercial Private Limited (VCPL) and ICICI. The agreements were extremely biased in favour of the VCPL and ICICI as it agreed to a host of conditions pertaining to the capital structuring of NDTV, which were unwarranted and had no bearing whatsoever with the loan, SEBI held.
VCPL Loan Agreements were very material and price sensitive information as they effectively involved passing of controlling stake of 30 percent share capital of NDTV and stipulated various conditions binding the promoters of NDTV with respect to their dealing in the shares, capital restructuring of the company etc.
By not disclosing the same to the shareholders, SEBI concluded that Roys bartered away the interests of NDTV by making them subject to the prior written consent of ICICI/VCPL without disclosing the same to the company.
SEBI, therefore, concluded that the conduct of Prannoy Roy and Radhika Roy failed to conform to the fair and transparent principles of trades in the securities market. The way loan agreements were used to deceitfully transfers shares of NDTV upto 30 percent to VCPL without the knowledge of Board or its shareholders, amounted to unfair trade practice and was in stark violation of Regulation 4(1) of PFUTP Regulations.
Further, as the Chairman and the Managing Director, respectively, Prannoy Roy and Radhika Roy were also actively running the day to day management of NDTV. Under the circumstances, they had this avowed duty to act in a fair and transparent manner to protect the interest of their minority shareholders and not to indulge in any fraudulent activity or any activity detrimental to the interest of the shareholders. By failing to do so, they also acted in violation of the Code of Conduct of NDTV.
SEBI, therefore, ordered the following:
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