SC excuses NDTV Promoters from making deposits for hearing appeals against SEBI’s Order

Feb 15, 2021 #NDTV #Prannoy Roy #Radhika Roy #SEBI

Umamageswari Maruthappan

The Supreme Court of India ordered in favour of the NDTV promoters, Prannoy Roy and Radhika Roy excluding them from making deposits for the hearing of their appeals before the Securities Appellate Tribunal(SAT).

“No amount shall be coercively recovered from the appellant for hearing the case,” the Bench of CJI S A Bobde and Justices AS Bopanna and V Ramasubramanian ordered.

However, Solicitor General Tushar Mehta expressed agitations on the applicability of this order to future cases, to which the CJI responded that “the order will not be treated as a precedent”.

The Apex Court Bench was hearing an appeal plea of Roys, promoters of NDTV, challenging the order passed by SAT that directed it to give 50% of the penalty imposed by SEBI within four weeks. The Judgement was made on 4th January 2021.

During the hearing on 28th January 2021, Adv. Mukul Rohatgi, Counsel for NDTV promoters, stated that the promoters are ready to give their shares of NDTV in the form of a security. When the Bench interrogated on the value of the shares, it was submitted that the shares worth more than the penalty that was supposed to be paid.

However, SG Mehta was concerned on replacing the said shares by any other securities. To this, Adv. Rohatgi submitted that there is no security currently with his clients.

Furthermore, arguments aroused between the two parties regarding the stay of deposit. The SG claimed that the aftereffects of non-payment of deposit is only prevention of entry in the share market whereas Adv. Mukul stated that non-payment could lead to attachment of the appellants’ properties.

The Top Court nonetheless exempted the appellants from payment of penalty imposed and directed the SAT to proceed with the hearing without demanding any deposits.

On November 27, 2020, SEBI directed the NDTV promoters to deposit Rs. ₹16.97 Crores as penalty. The said amount was alleged to have been wrongfully gained by the promoters through insider trading.

The Regulatory further imposed a ban on the two promoters from getting engaged with the securities market for a period of two years. The Roys went to the Securities Appellate Tribunal challenging the order SEBI.

The Tribunal ordered a deposit of 50% of the penalty within four weeks. This order was challenged before the Apex Court.The matter is listed to be heard on 6th March 2021.

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