In a major jolt to NDTV promoters, Prannoy Roy and Radhika Roy, Securities and Exchange Board of India has barred them from accessing Securities Markets and holding any management position in NDTV for the next 2 years.
The investigative agencies are probing NDTV for high-level tax frauds and financial irregularities and promoters Prannoy Roy and Radhika Roy have been under the scanner of multiple agencies for allegedly carrying out nefarious activities.
Earlier, Prannoy Roy and Radhika Roy were served with a show cause notice by the SEBI under the Securities and Exchange Board of India Act, 1992 (“SEBI Act”). According to the information provided to BSE, Prannoy Roy and Radhika Roy, the Promoters of New Delhi Television Limited (NDTV) received the said show cause notice on the 10th of September 2018.
The show cause notice was dated August 31, 2018, and was issued under Sections 11(1), 11(4) and 113 of the SEBI Ac by SEBI, alleging violation of provisions of Section 12A (d) and (e) of SEBI Act read with Regulation 3(i) and Regulation 4 of SEBI (Prohibition of Insider Trading) Regulations, 1992.
The SEBI act in Section 12 A specifically deals with insider trading which is the buying or selling of a security by someone who has access to material nonpublic information about the security. Insider trading can be illegal or legal depending on when the insider makes the trade. It is illegal when the material information is still nonpublic.
Before this, NDTV has had a similar brush with the law when they got a show cause notice from the Income Tax Department. Earlier, the IT Department show cause notice pertained to the IT Department levying a penalty of Rs. 436.80 crores for the assessment year 2009-10. The channel had later approached the Delhi High Court which had refused to intervene in the matter and in turn asked the channel to approach the Commissioner of Income Tax (Appeals).
The Principal Commissioner of Income Tax had refused to stay the demand and instructed the channel to pay 30% of the penalty amount in a staggered manner by 15th June 2018. The said three instalments of this amount had to be paid on 15 April, 15 May and 15 June respectively.
Update: SAT has stayed the SEBI order that barred Prannoy Roy and Radhika Roy from holding any managerial or directorial positions in NDTV.