Accused NDTV promoters Prannoy and Radhika Roy move HC challenging SEBI show-cause notice for insider trading

NDTV's Prannoy Roy (image: republicworld.com)

The promoters of controversial left-wing media NDTV – Prannoy Roy and Radhika Roy have moved the Bombay High Court, challenging a show-cause notice issued to them by the Securities and Exchange Board of India (SEBI) in 2018 for alleged violation of insider trading regulations.

According to reports, the High court stated that it will pass orders on January 6. The court also said the accused husband-wife duo could “face the notice” and attend hearings before SEBI.

The petition filed by accused Prannoy Roy and Radhika Roy sought that the court set aside the notice and direct SEBI to allow them to inspect all the documents, records and internal files and notings on which the regulator had relied before issuing the same.

Read: SAT upholds SEBI penalty of ₹2.10 crore on NDTV, ₹3 lakhs each on 3 directors for not disclosing tax demand on time

The SEBI had issued the notice on August 31, 2018, accusing both Prannoy Roy and Radhika Roy of trading shares of NDTV while in possession of “unpublished price sensitive information”. The notice accused them of violation of the “Prohibition of Insider Trading Regulations”.

However, Roys petition said the notice was “arbitrary, unreasonable and issued in gross abuse of power”.

Earlier in August, NDTV founders Prannoy Roy and his wife Radhika Roy were prevented from leaving the country by the CBI officials.

Read: Here is why Prannoy Roy and Radhika Roy were stopped at the airport and were not allowed to leave the country: Read details about the ICICI-NDTV loan fraud

In recent times, NDTV has been embroiled in controversies over alleged financial irregularities. NDTV is facing multiple cases related to violation of FDI norms, Income Tax violation, and non-compliance with disclosure norms.

The central investigative agency CBI is probing a case against NDTV in relation to a Rs 375 crore loan from ICICI Bank and a corresponding wrongful loss of Rs 46 crore to the bank. There is a chain of borrow, repay and borrow where Roys took a series of loans in 2008 as they sought to buy back a large chunk of NDTV shares from the market, allegedly violating foreign direct investment (FDI) rules in a 2007-09 investment, a charge denied by the company.

Read: Read full details of the new FIR filed by CBI: Prannoy Roy, Radhika Roy and Vikram Chandra accused of criminal conspiracy, cheating and corruption

An FIR was filed against Prannoy Roy, Radhika Roy, NDTV, RRPR Holdings Pvt Ltd and unknown officials of ICICI Bank by a company called Quantum Securities Limited in June 2017. The charges levelled were those of criminal conduct, conspiracy and cheating. QSL is a shareholder both in NDTV and ICICI and filed the FIR as an aggrieved party of the alleged misdeeds.

In August this year, the Securities Appellate Tribunal (SAT) had upheld a SEBI order imposing a penalty of Rs 2.10 crore on NDTV and Rs 3 lakhs each on 3 directors for violation of disclosure norms. It is alleged that the company and its directors failed to inform the stock exchanges about a tax demand of Rs 450 crore served by the income tax department.

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