SAT Stays SEBI Order Barring Prannoy Roy from Markets, NDTV Board

SEBI claims that minority shareholders were kept in the dark about three loan agreements.

3 min read
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News broadcaster New Delhi Television (NDTV) has said that it will file an appeal against market regulator SEBI's decision to impose Rs 12 lakh penalty on the company for failing to make timely disclosures to the stock exchanges.

This comes a day after the Securities Appellate Tribunal (SAT) stayed SEBI's order banning NDTV's three promoters – Prannoy Roy, Radhika Roy and their holding firm – from the capital markets for two years.

NDTV, however, said it is yet to receive the penalty order from the Securities and Exchange Board of India (SEBI).

“The company will be filing an appeal against the said order if and when the same is received by the company, and as per advice, this order is likely to be set aside in appeal.”
NDTV advisory

On Friday, SEBI had passed the order, which also restrained the two individuals from holding any board or top management role at the company for two years.

SAT, the appellate authority over SEBI, has listed the appeals filed by the Roys RRPR Holding Private Ltd on 16 September 2019 and the order, too, has been stayed till then.

SAT has observed that examination of the matters in SEBI’s order will require further consideration.

In the 51-page order on Friday, SEBI had instructed the debarment of RRPR Holdings Pvt Ltd, Prannoy Roy and Radhika Roy from:

  • Buying, selling and directly or indirectly dealing with securities
  • Being associated with the securities market
  • Their existing holdings, including mutual fund units, will also remain frozen during the prohibition period


SEBI claims that the Roys and RRPR violated various regulations by keeping minority shareholders in the dark about three loan agreements. One was with the ICICI Bank and two others with an entity called Vishvapradhan Commercial Private Ltd (VCPL).

SEBI said its probe began after receipt of complaints in 2017 from Quantum Securities Pvt Ltd, a shareholder of NDTV, about alleged violation of rules by non-disclosure of material information to the shareholders about loan agreements with VCPL.



The loan that was taken with ICICI Bank had a clause which did not allow the promoters to permit any major corporate restructuring, merger etc without prior written approval of the lender.

Last year, SEBI had ordered VCPL to make an open offer for NDTV Ltd for indirectly acquiring control of up to 52 percent stake through a convertible loan of Rs 350 crore.

SEBI Investigations claim to have found that one of the loans signed with VCPL did not carry any interest rate to repay the ICICI Bank loan that had an interest rate of 19 percent. 

However, one of the terms of the loan gave VCPL control over the entire shareholding of RRPR Holdings.

The second loan – Rs 53.85 crore allowed the promoters to indirectly acquire 30 percent stake in the media company through conversion of their warrants into RRPR Holdings shares.


Concealing such material information from public shareholders when the promoters are themselves dealing in the company shares allegedly amounts to a fraud committed on the minority public shareholders.

The company was bound to disclose such information to the shareholders to help them take informed investment decisions.

“The loan agreements were unmistakably structured as a scheme to defraud the investors by camouflaging the information about the adversarial terms and conditions impinging upon the interest of NDTV’s shareholders,” SEBI claims.



Founders of NDTV, Radhika and Prannoy Roy issued a statement calling SEBI’s decision outrageous and said that they will challenge the order in courts.

“Radhika and Prannoy Roy, the founders of NDTV, believe the SEBI order asking them to step down as directors and to not hold any management positions in NDTV is outrageous,” NDTV said in a statement.

Bad in law and against all procedures. It is, for example, unheard of that the order contains false decisions on issues that were not even mentioned in the show cause notice. They will challenge the SEBI order in the courts as advised within the next few days,” the statement added.

(With inputs from PTI)

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