Supreme Court To Hear SEBI's Challenge Against SAT Order Granting Relief To NDTV Promoters Prannoy Roy & Radhika Roy After Two Weeks

On July 20, the SAT at Mumbai had set aside the findings of the SEBI which held the Roys to be liable for committing fraud on its investors by non-disclosure of a loan agreement with Vishvapradhan Commercial Pvt Ltd. 

On Monday, a Bench of Justices Abdul Nazeer and V Ramasubramanian was inclined to issue notice in the batch of appeals but this was objected by Senior Advocate Abhishek Singhvi, appearing for Roys.

The Bench was told that Roys have also filed appeals against the SAT order to the extent penalties were imposed on them for violation of SEBI regulations.

"If both parties are aggrieved by the same order, why not issue notice in all the cases? What objection can you have?", the Bench asked.

Singhvi went on to state that the aspect of 'control' has been decided by two judgements of the Bench. He further argued that SAT had proceeded to pass a common order in the matter,

"SAT combines them and gives a common judgement. SEBI order in my case is totally different. SAT heard two sets of appeal and passed a common order."

Senior Advocate Maninder Singh, appearing for SEBI, said : "Before SAT, they consented that the matter can be heard together."

"Unless we go item wise, it will not lead us anywhere", the Bench then said, after an internal discussion. The Bench ultimately directed to list the matter after two weeks.

The SAT order had also reversed the SEBI finding that the promoters had ceded control to VCPL over NDTV through the loan agreement.

SEBI, in its order, had held that under the garb of a loan agreement, VCPL had acquired voting rights in NDTV in as much as the loan did not carry any interest and that the loan was repayable at the end of 10 years.

The SAT held that though the non-disclosure of the loan was a violation of the listing agreement, it said "such non-disclosure, in our opinion, is neither fraudulent nor found to be an unfair trade practice". It has thus set aside the order restraining the Roys from holding managerial or directorial posts for two years.

It has also reduced the penalty of Rs. 25 Crores imposed on RRPR Holdings (Promoter Group) to Rs. 5 Crores and the penalty of Rs 5 crores imposed on NDTV to Rs 10 lakhs. This prompted the parties to move the Supreme Court by way of appeals.

Case Title: Securities And Exchange Board Of India Versus Vishvapradhan Commercial Pvt. Ltd | C.A. No. 7312/2022, Prannoy Roy Versus Securities And Exchange Board Of India | C.A. No. 7135/2022 

Click here to read/download the order