The Securities Appellate Tribunal, SAT observed and has set aside the order passed by the Securities and Exchange Board of India, SEBI in November 2020, wherein it is held that Prannoy Roy and his wife Radhika Roy, who being the former promoters of NDTV is liable for insider trading.
The SEBI in its order had barred the Roys from buying, selling, and dealing in securities directly and indirectly for the period of two years. It has also been directed by them to disgorge more than Rs 16.97 crore gained from alleged insider trading in the scrips of NDTV.
It has also been found by SAT that Prannoy Roy and Radhika Roy had secured pre-trade clearance from the Compliance Officer of NDTV which being an admitted fact in the show cause notice and, thus, the traders executed by these two entities was in conformity with the NDTVs Code of Conduct and the Prohibition of Insider Trading Regulations.
Further, the SAT noted that there being no finding in the impugned order to the effect that the Compliance Office had acted improperly in granting permission to these two entities for selling during the period when the trading window was closed.
The order passed by SEBI was based on the probe which is conducted between September 2006 and June 2008, on a complaint against the news company. Therefore, after perusing all the records, it has been held by the board that the NDTV promoters made wrongful gains by dealing in company shares, while being in possession of Unpublished Price Sensitive Information, UPSI which pertains to the proposed reorganization of the company.
Accordingly, the SAT held that the information which relates to the reorganization of the company was not the price sensitive information.
It has also been held in the impugned order passed by the SEBI WTM, the Whole Time Member against Prannoy Roy and Radhika Roy cannot be sustained.