The Supreme Court Friday asked markets regulator Sebi not to take any coercive steps against NDTV promoters Prannoy Roy and Radhika Roy till it hears their pleas on September 3 against the penalty proceedings related to alleged violation of securities norms by concealing information from shareholders on certain loan agreements.
A bench headed by Chief Justice N V Ramana was requested by the Securities and Exchange Board of India (Sebi) that the hearing on the pleas of the NDTV promoters be adjourned till next Friday.
"We will adjourn, but do not take any coercive step," the bench, which also comprised Justices Surya Kant and Aniruddha Bose, told Solicitor General Tushar Mehta who was appearing for the Sebi.
The bench inquired from senior advocate Mukul Rohatgi, appearing for the Roys, about the status of hearing on the NDTV promoters' appeal before the Securities Appellate Tribunal (SAT).
The third member of the SAT is not there and the hearing on the appeals is stuck, Rohatgi said, adding that now the proceedings to levy the penalty have been initiated.
The apex court on February 15 disposed of the pleas of the Roys asking the SAT not to insist on deposit of half the amount of fines as a pre-condition for hearing their appeals against the Sebi orders.
The NDTV promoters challenged the SAT order directing them to deposit 50 per cent of the alleged unlawful gains which Sebi found to have been made by them.
"Having heard the matter for some time, we pass the following order by consent: The appellants' Appeal nos...shall be heard by the SAT at Mumbai without insisting on any deposit of amount... It is directed that no amount shall be recovered coercively from the appellants in the absence of any deposit. This order shall not be treated as a precedent in any other case. The appeals are, accordingly, disposed of," the top court had ordered.
The Solicitor General had said the deposit of money is a condition precedent for grant of stay on the direction of Sebi.
The SAT had directed the NDTV promoters to deposit 50 per cent of the disgorged amount before Sebi which had imposed a penalty on them for alleged violation of various securities norms by concealing information from shareholders regarding certain loan agreements.
While hearing their appeal against Sebi, SAT had further said that if NDTV were to deposit the amount, the balance would not be recovered during the pendency of the appeal before it.
In two separate orders passed on January 4, the tribunal had noted that the appeals filed by the Roy couple needed consideration and directed the appeals to be listed before the tribunal for final disposal on February 10, 2021.
This had come following appeals filed by the couple against a Sebi order passed in November last year, whereby the markets regulator had barred them from the securities market for two years and also directed them to disgorge illegal gains of Rs 16.97 crore for indulging in insider trading more than 12 years ago.
However, the charges were denied by the company. Sebi had noted that the duo together made the gains by indulging in insider trading in the shares of New Delhi Television Ltd (NDTV) while in possession of UPSI relating to the proposed reorganization of the company.
Prannoy Roy was the chairman and whole time director and Radhika Roy was the managing director during the period under investigation and were part of the decision making chain that had led to crystallization of the UPSI.
Discussions pertaining to reorganisation of the company started on September 7, 2007 and the disclosure was made on April 16, 2008.
Hence, September 7, 2007 to April 16, 2008 was unpublished price sensitive information (UPSI) period.
"The couple sold shares on April 17, 2008, when the trading window for them was closed and made a profit of Rs 16.97 crore," as per the Sebi order.
'By doing so, they violated Prohibition of Insider Trading (PIT) norms and also acted in contravention of NDTV's code of conduct for prevention of insider trading which prohibited them from trading at least till 24 hours after the information was disclosed to the stock exchanges," it added.