Markets regulator Securities and Exchange Board of India (SEBI) on Thursday imposed a penalty of Rs 27 crore on New Delhi Television’s (NDTV) promoters- Prannoy Roy, Radhika Roy and RRPR Holding.
The penalty was imposed for violating various securities norms, including Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations.
RRPR is a part of NDTV’s promoters’ group and had a 29.18 per cent stake in the company as of September 2020.
The regulator imposed the penalty against NDTV promoters for by concealing information from shareholders regarding certain loan agreements
SEBI on Thursday filed the order and said that the promoters and the promoter group company will have to “urgently appeal” against the order. The order is based on alleged non-disclosure of loan agreements entered into in 2008-2010 by the founders and the promoter group company with Vishvapradhan Commercial Pvt Ltd (VPCL) and ICICI Bank Ltd.
One of the terms of loan agreements allowed VCPL to indirectly acquire 30 per cent shareholding of NDTV through conversion of warrants into equity shares of RRPR Holding.
The loan agreements were structured in such a manner that clauses on various matters pertaining to NDTV, which were material and price sensitive information and were concealed from the minority shareholders.
SEBI imposed a fine of Rs 25 crore on Roys and RRPR Holding, which needs to be paid jointly and severally. Besides, a penalty of Rs 1 crore has been imposed on Prannoy Roy and Radhika Roy.
NDTV founders said they would appeal against the order at Securities Appellate Tribunal (SAT). They said the SEBI order is based on an incorrect assessment of facts and that they have never surrendered the company’s control to another entity.