New Delhi: The Securities Appellate Tribunal on Tuesday granted NDTV promoters Prannoy Roy and Radhika Roy interim relief from a regulatory order that restricted them from holding top management positions and continuing as directors in their broadcast television channel.
The Securities and Exchange Board of India (SEBI) had last week issued an order barring the Roys and their holding firm (RRPR Holdings Pvt Ltd) from the capital markets over allegedly keeping minority shareholders in the dark about three loan agreements.
One of the loan agreements that the market regulator flagged was with ICICI Bank, while the other two were with a firm called Vishvapradhan Commercial Private Ltd (VCPL), a little-known entity with links to Mukesh Ambani’s Reliance Group.
Responding to SEBI’s order last Friday, the husband-wife duo of NDTV called it “outrageous and bad in law” and said that they would challenge it legally.
On Tuesday, while hearing an appeal filed by the Roys and their holding firm, the Securities Appellate Tribunal granted an interim stay until the next hearing.
“At this stage, prime-facie, we are of the opinion that a listed company which is managed by the appellants holding more than 61% of the total shares cannot remain headless,” the tribunal said in its order.
“We accordingly, grant the respondent six weeks time to file a reply from today. Three weeks thereafter to the appellants to file a rejoinder. The matter would be listed for admission and for final disposal on September 16, 2019,” it added.
The SAT, however, made it clear that the interim stay was not a judgement on the merits of the SEBI case, noting that it would need to be “considered in detail”.
“We are of the opinion that whether the loan agreement was a sham transaction or not and whether the loan agreement, in fact, wrested control of NDTV to VCPL is a question which is required to be considered in detail,” the tribunal’s order noted.
“Whether call option gives an unfettered right of controlling the company without exercising the right of call option is also required to be considered. Upon the interpretation of the loan agreement at this stage, we are of the opinion that these agreements have remained in existence for the past 10 years. The loan agreements were executed in the year 2009 and 2010. Whether there was a violation of the SEBI laws including the PFUTP Regulations are all required to be considered.”