September 18, 2017
Dear Shri Tyagi
I am making a small demand on your valuable time over an issue of public interest and under the SEBI law which casts public law obligations on the SEBI. The issue pertains to the NDTV Limited.
At the outset, I wish to mention that over the last four years I have been investigating the alleged wrongdoings of NDTV Limited and its promoters. I had sent my findings with evidence to Shri Prannoy James Roy through Shri Ram Jethmalani, a senior lawyer, as advised by the latter and got Shri Roy’s response and put out both in the public domain through social media with my conclusion that there was much be to answered by the NDTV Ltd and its promoters. This was how my probe into NDTV Ltd affair started.
Media has also published extensively news and analysis on the wrongdoings of NDTV.
My investigation has been subsequently confirmed by the assessments made by the Income Tax Department and also by the probe initiated by the Enforcement Directorate.
I had also seen that there is a SEBI angle to the case. I thought that the SEBI would be acting on the facts that had been brought out.
- There have been specific and large instances of insider trading by the management & other key officials namely Shri Prannoy James Roy, Ms. Radhika Roy, Shri Vikramaditya Chandra, Ms. Barkha Dutt, etc., of NDTV Ltd, [which is subject to the supervision and control of SEBI & also subject to the regulations issued under the SEBI Act, 1992] & who had unhindered access to & control over the price sensitive information & in regard to which appropriate procedures & action are pending with the SEBI for long despite several complaints lodged.
- It is matter of record that NDTV Ltd. has been found by the authorities to have laundered huge amount of money running into thousands of crores of rupees which is more likely than not the proceeds of crime & to facilitate that & thereafter to cover the same, NDTV Ltd. & its Directors & key Executives have indulged in large-scale illegal & unlawful acts that includes the tax-evasion, providing bribe/ illegal gratification to the complicit public servants, embezzling Govt. money, insider trading, corporate frauds, manipulation of stock market, etc., which is obligated to be investigated by the concerned agencies including the SEBI of which there is enough documentary evidence available on record.
- The RBI, the I.T. Dept, the CBI, the ED, etc., have already begun statutory probes in the affairs of NDTV Ltd. & which has been upheld by the Delhi High Court to be fair & reasonable. Even the SEBI has found illegality in the conduct of the NDTV Ltd & in June 2015 has imposed a penalty of Rs. 2,00,00,000 upon it for the mischief of withholding price sensitive information from the BSE & the NSE regarding the demand of income tax of Rs. 4,50 crores over laundering of US $ 1,50 million through various tax-heavens.
- I have been pursuing the progress of the inquiries by the various Govt. agencies primarily to insulate the agencies & its officers from undue influence & interference of political vested interest/s & harassment by the NDTV Ltd. & its accomplices & have been seeking the legal, administrative & judicial remedies for that from time to time.
- Shri Sanjay Dutt, a minority shareholder of NDTV Ltd. & aggrieved party having suffered substantial losses over his investments has compiled cogent details of violation of the SEBI Act, 1992 which prima-facie discloses actionable causes & which according to him has been time & again submitted to the SEBI for action against NDTV Ltd. but which has remained pending with the SEBI. It is made out that the control of the company NDTV Ltd. has been wrested by the hidden investors (M/s VPCL) in the garb of loans given & taken thus not only playing fraud upon the Stock Exchanges (the BSE & the NSE) but also the minority shareholders who have been denied the reasonable opportunity on their investments with the share capital of the NDTV Ltd. Further, using their access to & control of price sensitive information, the Directors of NDTV Ltd. namely Sri Prannoy James Roy & Ms. Radhika Roy have traded in the shares of NDTV Ltd. through their proprietary company RRPR Ltd. to their unlawful & undue enrichment to tune of about Rs. 1,32 crores & which was denied to other shareholders like the minority shareholders denied of any such benefit.
- Shri Sanjay Dutt has stated that he had referred to the SEBI the violations of the following SEBI regulations, among many others for the necessary action-
- SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997
- SEBI (Prohibition of Insider Trading) Regulations, 1992
- SEBI (Prohibition of Fraudulent & Unfair Trade Practices) Regulations, 2003
- Listing Agreement formed in compliance with the Securities Contract (Regulation) Act, 1956
- It is stated by Shri Sanjay Dutt that the SEBI is of the view that there is no provision in the SEBI Act to grant hearing to an aggrieved shareholder & hence the SEBI is not in a position to hear the minority shareholder like Sri Dutt, etc.
- I am afraid the stand of the SEBI if reported correctly is rather misplaced. Shri Sanjay Dutt being an aggrieved investor who had lost substantial amount of money because of the mischief of the NDTV Ltd. & its management including insider trading & abuse of access & control of the price sensitive information is a witness of the said mischief & the market regulator of the status of the SEBI must interview him & appraise the evidence canvassed by him to ascertain the truth of the allegations made by him against the NDTV Ltd. & its management & at the best, he can be asked to file affidavit or record his statement on oath.
- It is material to note that the findings of the SEBI in a regulatory inquiry would be the source material for the ED for consideration under the PML Act, 2002 & any laxity on the part of the SEBI in discharge of its regulatory function would cause miscarriage of justice as the case of the ED would get prejudiced.
- I am also enclosing a note which, I understand, has emanated from SEBI to the higher authority the reported inaction of the SEBI in the matter. The issue that has been raised in the note is who controls NDTV Ltd now?
- I am also giving the links of two media reports on the issue who controls NDTV Ltd which will show that the control issue is clearly due for probe by SEBI.
- I am also attaching two documents, one a letter by SEBI to Shri Sanjay Dutt and another by NDTV Ltd to BSE which I consider relevant in the context of the subject of this mail. In its letter NDTV is denying there is any change of ownership which clearly incorrect and SEBI letter to VCPL, asking clarifications on change in ownershjp (pl. see point 4) is written to VCPL but not to the counter party, RRPL!
- I therefore, request you to look into the matter personally. It would be far more appropriate if your officers do consider examining Shri Sanjay Dutt, listed witness against NDTV Ltd. in a criminal case filed by the CBI qua the allegations of public law mischief & misconduct of NDTV Ltd. & its management.
I am forwarding a copy of this email to the Enforcement Directorate.
With kind regards
Shri Ajay Tyagi, IAS (Retd.)
The Securities & Exchange Board of India
SEBI Bhavan BKC
Plot No.C4-A, ‘G’ Block
Bandra-Kurla Complex, Bandra (East)
Mumbai – 400051, Maharashtra