Supreme Court asks Sebi not to take coercive steps against NDTV promoters; adjourns hearing to Sep 3

The NDTV promoters challenged the SAT order directing them to deposit 50 percent of the alleged unlawful gains which Sebi found to have been made by them.

Having heard the matter for some time, we pass the following order by consent: The appellants' Appeal nos...shall be heard by the SAT at Mumbai without insisting on any deposit of amount... It is directed that no amount shall be recovered coercively from the appellants in the absence of any deposit. This order shall not be treated as a precedent in any other case. The appeals are, accordingly, disposed of, the top court had ordered.

The Solicitor General had said the deposit of money is a condition precedent for grant of stay on the direction of Sebi. The SAT had directed the NDTV promoters to deposit 50 percent 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 the crystallization of the UPSI. Discussions pertaining to the 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Hence, September 7, 2007, to April 16, 2008, was unpublished price sensitive information (UPSI) period.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.

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 24 hours after the information was disclosed to the stock exchanges, it added.