The Bombay High Court dismissed a petition filed by NDTV promoters Prannoy Roy and Radhika Roy seeking to quash a show-cause notice issued by SEBI. They had moved the Bombay High Court on Thursday challenging the show-cause notice issued by the Securities and Exchange Board of India (SEBI).
A division bench of Justices SC Dharmadhikari and RI Chagla had taken up the petition on January 2, and had said that the bench will pass orders on January 6. On that day, the bench had said, “Face the notice. If as you say there is no material, then it (notice) will fall on the ground,” giving a hint that the petition will be rejected.
#BombayHC dismisses petition and refuses to interfere with show cause notice issued by #SEBI for alleged violation under Prohibition of Insider Trading Regulations against @ndtv promoters @PrannoyRoyNDTV and Radhika Roy
— Live Law (@LiveLawIndia) January 6, 2020
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notice on August 31, 2018, accusing both Prannoy Roy and Radhika Roy of trading shares of NDTV while in possession of “unpublished price sensitive information”.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”.
The notice 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 lnsider Trading) Regulations, 1992.
The notice pertains to the restructuring of NDTV into news-related businesses and investments beyond the news business in the year 2008. According to SEBI, the promoters of the company had traded shares of the company while in possession of price-sensitive and unpublished information related to restructuring of NDTV.
The Roys had challenged the show cause notice saying that the proposed restructuring was eventually not implemented. They had also said that the notice was issued ten years after the alleged violation, and relevant records are no longer available to defend their case.
But the Bombay High Court rejected their petition today, which means the NDTV promoters will have to respond to the notice issued by the SEBI and face the investigation.
NDTV and its promoters are already facing multiple probes in alleged financial irregularities. 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. 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 alleging criminal conduct, conspiracy and cheating. The Securities Appellate Tribunal (SAT) had also 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.