Report on Shemaroo

SC stays recovery of Rs 27 crore SEBI penalty from NDTV's Prannoy, Radhika Roy

Justice DY Chandrachud said it was “brash” of the SAT to ask for a 50 per cent deposit.

NEW DELHI: The Supreme Court on Friday put a stay on the recovery of Rs 27 crore as penalty from NDTV promoters Prannoy Roy and Radhika Roy and their holding company, reported Live Law. The penalty was imposed in December last year by the Securities Exchange Board of India (SEBI) for allegedly concealing information from shareholders about certain loan agreements.

The Roys had filed an appeal against the penalty at the Securities Appellate Tribunal (SAT). In January, the tribunal asked them to deposit 50 per cent of the amount to SEBI within four weeks. Later that month, the promoters moved the Supreme Court against the SAT order and sought to offer shares of their channel to pay up the amount.

On 15 February, the apex court had exempted the promoters from making the deposit for hearing at the SAT.

The bench comprising justice DY Chandrachud asked the Roys to cooperate in the disposal of the appeal by SAT, which is listed for final hearing on 6 April, Live Law reported.

Senior advocate Mukul Rohatgi, counsel for the NDTV promoters, laid out the chain of developments in the case to the court. He said that the two promoters had taken a loan of Rs 375 crore from ICICI Bank in 2008, which was repaid by VCPL. The channel owners then took another loan from VCPL for which they did not have to pay interest.

SEBI had alleged that this led to transfer of control, an information that was concealed from shareholders, amounting to violation of regulatory norms.

Rohatgi argued against SEBI’s allegation that the promoters had transferred control of the channel to VCPL. “How can I transfer control without any transfer of shares,” the advocate asked, as quoted by Live Law. “I have all the shares.”

Solicitor general Tushar Mehta, appearing for SEBI, argued that these are not mere allegations, but a 100-page decision against Prannoy and Radhika Roy.

“They are saying that they have not transferred the shares...Their shares are worthless,” Mehta said. “There is a direction by a statutory regulatory body that penalty has to be paid.”

He went on to state that the SAT decision asking them to file a deposit amount has been a practice in the tribunal.

However, justice Chandrachud dismissed the arguments and said that it was “brash” of the SAT to ask for a 50 per cent deposit.

“There has to be some consistency,” Chandrachud said. “Without any reason, you say 50 per cent deposit... You are exercising the power of stay. You are asking for some amount. There has to be some observations.”

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