Securities and Exchange Board of India (SEBI) on Thursday imposed a penalty of Rs 25 crore on NDTV. Besides, NDTV promoters Prannoy Roy ans his wife Radhika have been asked to shell out Rs 1 crore each. The market regulator has said that the fines have been imposed for violating “various securities” norms. It said the promoters had hidden information from shareholders regarding various loan agreements.
The promoter entity of NDTV, RRRR Holdings, has been fined as it had hidden information about loan agreements. These agreements could have an adverse impact on the shareholders of the company and as such constituted a serious violation of norms.
SEBI started investigations after receiving complaints from Quantum Securities Private Limited, a shareholder of NDTV in 2017. The complaints gave details regarding non-disclosure of information regarding loan agreements with Vishvapradhan Commercial Private Limited (VCPL) and ICICI Bank.
SEBI said that the promoter company had taken a loan of Rs 350 crore in 2009 to repay an ICICI Bank loan. A second loan agreement with VCPL was signed for a sum of Rs 53.58 crore. There were terms and conditions in these agreed that impacted NDTV functioning.
The loan agreements were drafted in such a way that matters pertaining to NDTV, having price sensitive information, were not shared with minority shareholders. The loan terms also allowed VCPL to indirectly acquisition of 30% shares in NDTV.
Roys, promoter couple, have claimed that NDTV was not a party and hence there was no need to disclose the agreement to stock exchanges. There were “stipulations which included NDTV’s capital restructuring, which was agreed to be signed by Prannoy Roy and Radhika Roy”, SEBI Adjudicating Officer Amit Pradhan said, explaining fines by the regulator.
This was a clear violation of code of conduct of NDTV and provisions of equity listing agreement. As such, fines were being imposed on the holding company as also on promoters individually, SEBI said in its order.
