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, Live Law reported. The penalty was imposed in December last year by the Securities Exchange Board of India for allegedly concealing information from shareholders about certain loan agreements.
The Roys had filed an appeal against the penalty at the Securities Appellate Tribunal. In January, the tribunal asked them to deposit 50% 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 February 15, the Supreme Court exempted the promoters from making the deposit for hearing at the SAT.
The Supreme Court on Friday asked the Roys to cooperate in the disposal of the appeal by SAT, which is listed for final hearing on April 6, Live Law reported.
Appearing for the NDTV promoters, Advocate Mukul Rohatgi narrated 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, in turn, took another loan from VCPL for which they did not had to pay interests.
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 the 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, according to 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 said that the SAT decision asking them to file a deposit amount has been a practice in the tribunal, Live Law reported.
However, Justice DY Chandrachud dismissed the arguments and said that it was “brash” of the SAT to ask for 50% deposit.
“There has to be some consistency,” Chandrachud said. “Without any reason, you say 50% deposit... You are exercising the power of stay. You are asking for some amount. There has to be some observations.”