(G.N.S) Dt. 18
– Rs 3 lakh each on the company’s 4 co-founders including Prannoy Roy
Capital markets watchdog Sebi has imposed a penalty of Rs 10 lakh on media firm NDTV and of Rs 3 lakh each on four individuals, including promoters Prannoy Roy and Radhika Roy, for certain disclosure lapses.
The order follows a probe by Sebi (Securities and Exchange Board of India) into alleged delay in disclosure about Rs 450 crore income tax demand — subsequently challenged by NDTV, which has been in cross hairs of various agencies — and about sale of some shares by a top company executive over four years ago.
Besides this, the market watchdog also charged a fine of Rs 3 lakh on the company’s co-founders Prannoy Roy and his wife Radhika Roy, former Chief Executive Officer Vikramaditya Chandra and former compliance officer Anoop Singh Juneja in an order dated March 16.
The fine was levied over a delayed disclosure of a Rs 450-crore income tax notice in 2014.
Subramanian Swamy alleges NDTV’s Prannoy Roy will escape to South Africa; Roy calls him a liar
In its 23-page order dated March 16, Sebi imposed penalty of Rs 10 lakh on NDTV and Rs 3 lakh each on Prannoy Roy, Radhika Roy, Vikramaditya Chandra (group CEO at that time) and Anoop Singh Juneja (compliance officer).
Sebi said it had also issued notices to the company’s erstwhile executive vice chairman K V L Narayan Rao, but proceedings against him abated due to his death late last year.
The regulator said the persons in charge of a company or the principal officer are liable for the compliance of clause 36 of the listing agreement, which deals with disclosure by a listed company of any share price sensitive information.
Sebi noted that Prannoy and Radhika Roy were the Executive Co-Chairpersons and Chandra was the Group CEO and Executive Director constituting the top management of the company, while Juneha was the Company Secretary and Compliance Officer.
These people constitute the management of the company who are responsible for the day-to-day and overall operations of the company,” the order read.
“Further, it is an admitted fact that the decision not to disclose the tax demand was a conscious decision taken by the management of NDTV.”
Previously, a fine of Rs 2 crore had been imposed on NDTV because of a different proceeding related to a non-disclosure of the same income tax demand.
Earlier, Prannoy Roy was in headlines when BJP leader Subramanian Swamy got enagaed with him in a twitter arguement. The conversation got heated up with Swamy asking for a lookout notice against Roy.
Sebi said it has taken note of NDTV having been already penalised of Rs 2 crore through a different proceeding with respect to non-disclosure of the said income tax demand of Rs 450 crore.
Taking on to the Twitter, Swamy asked the Enforcement Directorate (ED) and the IT Department to issue a look out notice, as he believes Roy could escape to South Africa.
“For the purpose of imposing penalty, I have taken cognisance of the fact that for the same violation, Noticee no-1 (NDTV) was already penalised and therefore I am inclined to take a lenient view and impose a penalty of Rs 3 lakh on each Noticee nos 3 to 5 (Prannoy Roy, Radhika Roy and Chandra) for violation of Clause 36 of the Listing Agreement…,” the adjudicating officer said in the order.
Besides, Juneja was fined Rs 3 lakh for violations of Clause 36 of the Listing Agreement and of another clause relating to Code of Corporate Disclosure Practices under Sebi’s insider trading regulations.
Sebi said it conducted investigation based on a complaint received from Quantum Securities, a shareholder of NDTV, that NDTV did not disclose the order of Dispute Resolution Panel-II of the Income Tax Department, within 2 days of receipt of information, to the stock exchanges.
There was also allegation that Vice Chairperson of NDTV had engaged in insider trading by selling his shares based on the information about DRP-II order and did not make the required disclosures to the stock exchanges regarding the sale of his shares as required under Sebi (Prohibition of Insider Trading) Regulations, the order said about the case.
The first adjudicating officer for the case was appointed in August 2015, while show-cause notices were also issued in the same month.
The allegations included about Rao having made delayed disclosure to the stock exchanges about share sale transactions worth Rs 5 lakh, and NDTV having made delayed disclosure regarding the tax demand of Rs 450 crore raised against the company by the Income Tax Department.
NDTV was also accused of making delayed disclosures about Rao’s disclosures, while it was alleged that Roys, Chandra and Juneja were also liable for these infractions being the executives in-charge of the firm.
In their submissions, Rao and others denied any lapses on their part and had said they had made all the required disclosures in a timely manner and it had found the tax demand “devoid of any merit in law”.