The Honorable Securities and Appellate Tribunal (SAT) vide order pronounced on 7th August 2019 has dismissed the appeals filed by New Delhi Television Limited (“NDTV”), Dr. Prannoy Roy, Ms. Radhika Roy and a former Key Managerial Personnel (KMP), relating to imposition of penalties by the SEBI relating to disclosure obligations under Clause 36 of the Listing Agreement, vide orders dated 4th June 2015 & 16th March 2018.
The penalties originally imposed by the Securities Exchange Board of India (SEBI), of Rs 2 crores (Rs 1.75 crores under Section 23E and Rs 25 Lacs uncle: Section 23A of the Securities Contracts (Regulations) Act, 1956) on NDTV, and Rs.3 Lac: each on Dr. Prannoy Roy, Ms. Radhika Roy, and three former officials have been confirmed by the Tribunal relating to non-disclosure of the said tax assessment order dated 21st February 2014. A penalty of Rs 2 Lacs imposed on the former Compliance Officer has been deleted.
The order of 7th August 2019 also deals with a separate appeal which concerns disclosure obligations in the matter of sale of shares by (Late) Vice-Chairperson Mr K.VIL Nara} ‘ Rao under Regulation 13(6) of the Prohibition of Insider Trading (PIT) Regulations Code of Corporate read with Clauses 2.1, 3.2 and 7.0 of Schedule II for Code of Corpor Disclosure Practices read with Regulation 12(2) of PIT Regulations in relation to which penalties originally imposed by the SEBI of Rs.10 Lacs on NDTV and Rs.1 Lac on former Compliance Officer have been confirmed by the Tribunal, thus dismissing the appeals filed by NDTV and the former Compliance Officer challenging the order dated 16th March 2018.
In the matter of the Clause 36 disclosure obligations, NDTV has asserted that because of an expert tax lawyer’s advice to the effect that the tax assessment order dated 2|St February 2014 was untenable, it was entitled to defer disclosure to the BSE and NSE. As to the sale of shares by (Late) Vice-Chairperson Mr. K.V.L Narayan Rao, evidence ‘of transmission of disclosures to BSE and NSE were produced. NDTV, Dr. Prannoy Roy, and Ms. Radhika Roy are proposing to exercise the statutory right to file appeals to the Supreme Court, under Section l5Z of the SEBI Act.
NDTV in a statement said “NDTV maintains that it followed all procedures and requirements and made full disclosures regarding what was, in fact, a false tax demand that was served on the company for a proper and legitimate investment of $150 mn by NBC, one of the top American TV networks and a subsidiary of General Electric at the time. The outrageous and mischievous tax demand was made in 2014 for Rs. 450 crores. The investment was disclosed both by NDTV in India and in the USA by NBC’s parent company, General Electric, at the time and in keeping with all regulations and processes.
To call this legitimate and publicly declared investment a “sham transaction” was and remains a travesty of the truth; NDTV is fighting multiple legal cases based on this ludicrous allegation. The false charge that NDTV withheld information has been made by a shareholder who has on several occasions demanded money from the company for withdrawing false complaints. He has filed multiple false and malicious cases against NDTV as part of a lengthy and vicious campaign”
