SEBI barred NDTV Ltd’s key promoters – Prannoy Roy, Radhika Roy, and their holding firm RRPR Holdings – from the capital markets for two years and also restricted them from holding key managerial posts in any listed company for one year
“In the absence of material information relating to ICICI loan agreement being available in the public domain, the Roys are alleged to have committed fraud on the minority public shareholders of the company,” stated SEBI.
- Roy is currently the executive director — chairperson of the listed media entity while Ms. Roy is an executive director as per the BSI reports.
- Prannoy and Radhika held 15.94 percent and 16.33 percent respectively, while RRPR Holding has a stake of 29.18% in the listed entity.
- The three entities, RRPR Holdings, ICICI Bank and Vishvapradhan Commercial Pvt. Ltd. (VCPL) concealed material information from shareholders while entering into loan agreements.
- SEBI said the founders had violated the company’s code of conduct by not disclosing the binding clauses of the agreement to the stock exchanges
- After the agreement, the promoters of the company had vested their voting rights to the extent of 30% in favor of a third external party.
- Due to the non-disclosure of this agreement, the investors were not able to take an informed decision while dealing in shares of NDTV.
SEBI received a complaint in 2017
The NDTV shareholder Quantum Securities complained to SEBI in 2017 that the promoters had violated rules by not disclosing material information about loan agreements. While scrutinizing, the regulator alleged that the promoters of NDTV entered into three loan agreements – one with ICICI Bank and two with VCPL.
These agreements contained material and price-sensitive information. Decisions on key company matters were subject to prior written consent from the lenders, something minority shareholders were ignorant of. Further, under the VCPL agreements, a beneficial interest in 30% of NDTV was effectively vested in VCPL.
SEBI alleged that all this information was material and would have influenced the decisions of investors in NDTV, had they been aware of it.
Denying the allegations, Roys will take a legal action
The promoters Pranay Roy and Radhika Roy are not in support of SEBI judgment, they believed that they have been wrongly assessed and soon they will be taking legal action as advised within the next few days.