The Securities and Exchange Board of India (SEBI) on Thursday imposed a hefty penalty on NDTV to the tune of Rs 27 crore for violating regulatory norms. The market regulator has fined Rs 25 crore on NDTV and Rs 1 crore each on its promotors and co-founders Prannoy Roy and and Radhika Roy.
SEBI's penalty on New-Delhi-based television news company follows a complaint from Quantum Securities Pvt Ltd on August 26, 2017, which involves 3 loan agreements signed between RRPR Holdings Pvt Ltd, promoter entity of New Delhi Television Ltd (NDTV), Prannoy Roy and Radhika Roy as one party and ICICI Bank Ltd and Vishvapradhan Commercial Private Limited (VCPL) as other parties.
SEBI said that certain loan agreements had clauses that affected the functioning of NDTV. The agreement signed between NDTV promoters and VCPL in 2009 was for a loan amount of Rs 350 crore to repay the ICICI Bank loan and a second loan agreement with VCPL was signed for Rs 53.85 in 2010.
What is the case about?
According to SEBI, the said loan agreements had some clauses that had an adverse effect on the interests of public shareholders of NDTV. One of the terms of loan agreements allowed VCPL to indirectly acquire 30 percent of NDTV shareholdings through the conversion of warrants into equity shares of RRPR Holding.
"I admit this position that NDTV was not a party to these loan agreement, however, contents and clauses of loan agreement clearly demonstrates that the scheme was devised by the notices in such a way that though NDTV would not be a party to the said loan agreements, yet the loan agreements would contain certain crucial, onerous and hostile stipulations pertaining to NDTV," Sebi Adjudicating Officer Amit Pradhan said.
