Markets regulator Sebi on Friday barred NDTV promoters Prannoy Roy and Radhika Roy from accessing the securities markets for two years.
Moreover, Prannoy and Radhika also cannot hold management positions in NDTV during this period.
The Securities and Exchange Board of India initiated investigation after an NDTV shareholder alleged that RRPR Holdings (promoter of NDTV), Prannoy Roy and Radhika Roy didn’t disclose information about loan agreements entered into by them with Vishvapradhan Commercial (VCPL).The Sebi's period of investigation was from October 14, 2008 to November 22, 2017.
As per the order issued on Friday evening, the Roys cannot buy or sell securities, and directly or indirectly cannot remain associated with the securities market for the next two years.
The existing holding, including units of mutual funds of the promoters will also remain frozen. Investigation by Sebi revealed that a corporate rupee term loan facility agreement was entered into NDTV and ICICI Bank on October 14, 2008.
“Since, the information related to ICICI loan agreement was concealed from the public shareholders of NDTV, the shareholders were not aware of any such agreement entered into by promoter directors of NDTV. In the absence of material information relating to ICICI loan agreement being available in the public domain, they were not in a position to any informed decision with respect to dealing in the scrip of NDTV,” Sebi’s Whole Time Member S K Mohanty said in the order.
“Hence, by concealing such material information while personally dealing in shares of the company, the noticees were alleged to have committed fraud on the minority public shareholders of the company,” he added.
According to Sebi, the company and its promoters entered into three loan agreements, one with ICICI and two with VCPL. “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, thereby inducing innocent investors to continue to trade in the shares of NDTV oblivious to such adversarial developments in the shareholding of NDTV,” the Sebi’s order said.
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