NDTV insider trading: SAT sets aside orders against Prannoy Roy, Radhika Roy

The Securities Appellate Tribunal on Thursday set aside a SEBI order that barred former New Delhi Television Ltd. promoters Prannoy Roy and Radhika Roy for two years from the market, for indulging in insider trading.

The tribunal also set aside disgorgement orders against the founder-promoter duo. The court, however, only partly set aside orders against Vikramaditya Chandra, the group chief executive officer, for the relevant period and remitted the matter back to the Securities and Exchange Board of India.

Following an investigation conducted between Sept. 26, 2007 and June 2008, the markets regulator barred the former NDTV promoters in Nov. 2020, for several violations of insider trading regulations. The regulator also directed them to disgorge illegal gains of over Rs 16.97 crore, for indulging in insider trading more than 15 years ago.

SEBI also barred seven other entities, including Chandra, from trading in the shares of the company, for periods varying from one to two years. Chandra was asked to disgorge Rs 6.67 lakh in illegal gains.

According to the regulator, Prannoy Roy, along with his wife Radhika Roy, made trades of the company’s shares during his chairmanship, while holding price-sensitive information about the company’s reorganisation.

As per SEBI regulations, a person in possession of price-sensitive information is barred from trading until the information becomes public. This was further tightened by an NDTV code of conduct that barred them from trading for at least 24 hours, after the information was disclosed to the stock exchanges.

The discussions pertaining to the company’s reorganisation commenced on Sept. 7, 2007, and the information was made public on April 16, 2008. Prannoy Roy and Radhika Roy sold shares on April 17, 2008, when the trading window for them was still closed. By doing so, they violated SEBI’s insider trading regulation. Pursuant to the finding, the regulator barred them from the securities market for two years and also directed them to disgorge illegal gains along with a 6% interest per annum.

The Roys stepped down as directors of NDTV in December 2022, after the Adani Group acquired a 27.26% equity stake in the company from the promoter duo. The Roys continue to hold a 2.5% stake each in NDTV. BQ Prime