SAT: NDTV Promoters to Deposit 50% of Disgorged Amount Before SEBI

SAT: NDTV Promoters to Deposit 50% of Disgorged Amount Before SEBI

The Securities Appellate Tribunal (SAT), Mumbai in two similar orders, Dr. Prannoy Roy vs SEBI & Ors. and Radhika Roy vs. Securities and Exchange Board of India &Ors. ordered the two NDTV promoters, Prannoy Roy and Radhika Roy to deposit 50% of the disgorged amount before the Securities Exchange Board of India (SEBI) within four weeks' time period.

Erstwhile, in November last year, the two promoters were restrained by SEBI from accessing the securities market for 2 years for having made undue gains of Rs. 16.97 crores which was presently being heard by the appellate tribunal.

An appeal was filed before the SAT by the two appellants who were NDTV promoters, against the impugned order dated 27th November, 2020 passed by S.K. Mohanty, Whole Time Member of SEBI wherein they were restrained by the Board from accessing the securities market for 2 years on the ground of making undue gains of over Rs. 16.97 crores by way of committing insider trading in transactions between December 2007 and 2008.

Consequently, SEBI had directed to restrain them from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, of any kind, for a time limit upto 2 years.

The main contentions raised by Senior Advocate Janak Dwarkadas and Advocate Fereshte Sethna who were appearing on behalf of the appellants in the appeal were, firstly¸ whether there has been an undue delay in the initiation of the proceedings when the transactions were made on the platform of the stock exchange and secondly, whether the valuation pertaining to the reorganization of the company as disclosed on April 16, 2008 which amounts to a deemed price sensitive information under Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992?

The raised their defence on the ground that they attributed full knowledge of all their trades to SEBI and the stock exchanges and that none of their legal advisor firms ever alerted them on possible infraction of the Prevention of Insider Trading Regulations, 1992, in respect of any of these transactions.

The Tribunal while dealing with appeals ruled that both Prannoy Roy and Radhika Roy must deposit 50% of the disgorged amount before the Securities Exchange Board of India, the respondent in the case, within four weeks.

"If the said amount is deposited the balance amount shall not be recovered during the pendency of the appeal. The amount so deposited would be kept in an interest-bearing account and would be subject to the result of the appeal," read the order.

In addition to this, the Tribunal correspondingly directed the respondent SEBI to file a reply within three weeks, however a rejoinder may be filed within a week thereafter.

The matter is further listed for final disposal on 10th February, 2021