On Friday, NDTV (New Delhi Television ltd.) media promoters, Prannoy Roy and Radhika Roy were barred from the securities market for two years by Securities and Exchange Board of India(SEBI). The regulator has also directed them to spew alleged illegal gains of more than Rs.16.97 crore for indulging in insider trading for more than 12 years ago.
The big names from the media house have been accused of insider trading which refers to buying or selling of a publicly traded company’s stock by someone who has ‘non-public, material information’ about that stock. Moreover, ‘non-public, material information’ is any information that could substantially impact an investor’s decision to buy or sell the security that has not been made available to the public.
Other than this, the regulator has barred seven individuals and entities for insider trading in the shares of the company for a period varying from one to two years. Some of them are also accused of making illegal gains made from trading in the shares when they were in possession of Unpublished Price Sensitive Information (UPSI).
The directions follow a probe conducted by the markets regulator between September 2006 and June 2008 wherein various violations of insider trading regulations were found.
However, NDTV in it’s statement has clarified that SEBI’s order against it’s founder is based on inaccurate assessment of facts and the company will soon appeal against it. In the statement they have said, “The SEBI order on “insider trading” is based on an inaccurate assessment of facts and will not withstand scrutiny in appeal. The appeal will be filed immediately.” The SEBI order also names and fines three former senior NDTV executives including its former CEO and CFO.
As per a report by news agency PTI, The amount has to be paid jointly or severally by them along with 6 per cent interest from April 17, 2008 till the date of actual payment. All the entities have violated Prohibition of Insider Trading (PIT) Regulations, Sebi said in three separate orders passed late on Friday.
Sebi noted that Prannoy Roy and Radhika Roy together made a gain of Rs. 16.97 crore while indulging in insider trading in the shares of New Delhi Television Ltd (NDTV) while in possession of UPSI relating to the proposed reorganization of the company. Prannoy Roy was the chairman and whole time director and Radhika Roy was the managing director during period under investigation and were part of the decision making chain that had led to crystallization of the UPSI.
(With Inputs from PTI)
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