The tribunal gave Sebi six weeks to file its replies and three weeks to the appellants thereafter to file their rejoinders and listed the matter for hearing on September 16.
NDTV promoters Radhika and Prannoy Roy Tuesday secured an interim stay from the Securities Appellate Tribunal (SAT) against the Sebi order that banned them and the holding company of the news channel from the securities market for two years. Coming down heavily on the Sebi for not giving a copy of the ban-order, issued last Friday to the Roys and the company even after so many days, SAT asked the markets watchdog to ensure that its orders are served to the aggrieved party first.
The tribunal gave Sebi six weeks to file its replies and three weeks to the appellants thereafter to file their rejoinders and listed the matter for hearing on September 16. Restraining the Roys from occupying position as a director of NDTV will be prima facie not in the best “interest of the shareholders of the company or for that matter the investors at this stage”, the SAT said on the appeal by the Roys and their holding company RRPR Holdings.
“Therefore, we stay the effect and operation of the impugned order till the next date of hearing. However, the appellants (Roys) shall not alienate or create any encumbrance on their shareholding in NDTV till further orders,” a SAT bench comprising presiding officer Tarun Agarwala, along with member CKG Nair and judicial member MT Joshi, said.
Sebi had barred Prannoy and Radhika Roy and RRPR Holdings–from the markets for two years and also restrained the Roys from holding any board/top management positions in the firm during this period. The Roys have also been barred from holding board/ key managerial positions at any other listed company for one year, Sebi said while coming down heavily on them and RRPR Holdings for what it termed as gross violation of various regulations by keeping minority shareholders in the dark about three loan agreements.
NDTV and the Roys moved SAT Monday with three appeals, filed by the Roys and RRPR Holdings, respectively. The tribunal also came down heavily on the appellants not being given an order at all by Sebi and asked the regulator to revisit the practice. “We are constrained to observe that the system undertaken by Sebi needs a revisit. Their liability and their onerous duty don’t end the moment they upload an order on their website.
“Their first duty is to supply a copy of the order to the aggrieved party which in the instant case has not been done till date,” it said, directing the petitioners to apply for a certified copy of the Sebi order. Sebi had said the Roys had kept minority shareholders in the dark about loan agreements that they had entered.
One such loan agreement was with ICICI Bank, while two loans were from a little-known trading firm called Vishvapradhan Commercial. The ownership of this Delhi-based wholesale trading firm, incorporated in 2008, is said to have later changed hands from Reliance Industries to the Nahata group, from which the Mukesh Ambani-led firm had bought Infotel Broadband in 2010 to re-enter the telecom business.
Early last year, Sebi had ordered Vishvapradhan Commercial to make an open offer for NDTV after it had indirectly acquired up to 52 percent stake through a convertible loan of Rs 350 crore in 2009, which was ‘sourced’ from an arm of Reliance Industries.
In a 51-page order, Sebi had Friday said all its directions, including debarment of RRPR, and the Roys from buying/selling/otherwise dealing directly/indirectly in securities markets, or being associated with the securities markets, will come into effect immediately. The NDTV counter closed almost 1 percent down at Rs 35 on the BSE, whose benchmark Sensex gained o.22 percent after two weeks of loses.