New Delhi, Dec 25 (IANS) Prannoy and Radhika Roy, the founders and promoters of New Delhi Television Ltd (NDTV), along with another promoter entity RRPR Holding, will appeal against the Securities and Exchange Board of India (SEBI) order imposing a total fine of Rs 27 crore for concealing information from shareholders on certain loan agreements.
Apart from the Rs 25 crore penalty on NDTV promoters, the capital market has also imposed a fine of Rs 1 crore each on Prannoy and Radhika.
The SEBI order, dated December 24, said that if the noticees fail to pay the penalty within 45 days, recovery proceedings may be initiated.
In a regulatory filing, NDTV mentioned that the promoters through disclosures to the stock exchanges have repeatedly said that they have never allowed for transfer of NDTV’s control and that they continue to own and hold 61.45 per cent of the total paid up share capital of in the media entity.
“They have today informed the company that an order by the Securities and Exchange Board of India (SEBI), dated December 24, 2020, has found otherwise. They will urgently appeal against this order, which is based on the alleged non-disclosure of the loan agreements entered into in 2008-2010 by the Founders and the Promoter Group Company with Vishvapradhan Commercial Private Limited and ICICI Bank Limited,” it said in its filing.
The company said that the issue of the alleged surrender of control is pending in the Securities Appellate Tribunal. In 2019, SAT had granted a stay in favour of the founders of NDTV.
“The founders have informed the company that their lawyers, led by Fereshte Sethna, Senior Partner at DMD Advocates, hold that the SEBI order is inter alia based on an inaccurate assessment of facts and will not withstand scrutiny in appeal,” it said.
The SEBI investitgation found that a corporate rupee term loan facility agreement was entered into between RRPR and ICICI Bank in October 14, 2008. It was also observed that on August, 6, 2009, an amended agreement for prepayment of the said loan was entered into between the Roys, RRPR Holding and ICICI Bank.
The SEBI probe found that NDTV promoters in their loan agreement with ICICI Bank had agreed not to permit any merger, demerger, consolidation, or scheme of arrangement with its creditors or shareholders without the prior written approval of the bank.
“It was observed that the ICICI loan agreement had clauses which imposed certain restrictive conditions which were binding on the company and required the approval of ICICI Bank before underating any corporate restructuring. It prima facie appears that the same adversely affected the interst of public shareholders of NDTV,” the SEBI order said.
Therefore, it was alleged that the ICICI loan agreement was material and price sensitive in nature and should have been disclosed to the company by the noticees, who failed to do so, said the order dated December 24.