While the Securities and Exchange Board of India (SEBI) have finally ruled on NDTV, deeming them not fit and proper to run the company (or be on any other company’s board), it is imperative that any judicial authority (the SEBI Appellate Tribunal (SAT), High Courts or Supreme Courts) refuse to grant a stay in this order. The Roys are entitled to a full hearing at any judicial forum, but having written two books on this subject, in my humble opinion, a stay against the order should not be given. SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003, has held that they are not just not fit and proper but held guilty of Fraud under SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003. Here are some compelling reasons as to why a prima facie stay is not justified based on preliminary/ summary hearing:
- As soon as the order came, it behooved NDTV to notify the stock exchanges (BSE, NSE etc.) of the SEBI order and a notification to the effect that the said individuals have resigned with immediate effect. Instead, what one saw was a release by the NDTV compliance officer essentially whining about the SEBI order. The SEBI order itself should have been posted on the website! There is also a question of the legality of the Compliance Officer making a release on part of the promoters. His loyalty is to the company, not promoters! As of the writing of this post, this has not happened. Hubris?
- Did the Board of NDTV convene to sack the Roys and appoint a new Management team? This is not only a public company but also a News Media organization with a global reach. Why has no action been taken by them? The Board’s responsibilities and obligations are to the company and the shareholders, not the crooked promoters. Wake up, NDTV board!
- The disclosure to the stock exchanges goes on to state that the promoters are confident that the order won’t stand on appeal! What blather! The order by SEBI is just a tip of the iceberg on the number of crimes committed by the Roys (a detailed analysis on this will come shortly). Allowing them to continue in their positions, even for a day, will allow them to destroy evidence, influence witnesses and much more!
And what about the regulating agencies?
Since NDTV is a news organization, it is held up to a higher bar. Travel anywhere outside India and you are likely to see only NDTV channel in your hotel room cable lineup for India news. The scope for mischief is unlimited. Like the previous time, when Prannoy Roy convinced some innocent friends to come to join him in the Press Club and rant against the government, what prevents NDTV from trying to cry rivers of victimhood and get their “friends” in the media to show what an “injustice” this government is meting out to them?
Ministry of I & B should ask Roys to step down immediately
The Ministry of Information and Broadcasting (MIB), taking cognizance of SEBI’s ruling, should have asked the Roys to step down with immediate effect. It should have directed the Board to convene immediately and choose a new management team, failing which, they should be asked to go off the air until new management is in place.
Dr. and Mrs. Roy, why are you hiding behind NDTV, a public company that is not a sole proprietorship? You have the full right and freedom of speech to make your statement. Your press release should have been issued in your individual capacity and your private company (RRPR Holdings Pvt. Ltd.). Why should the Company Secretary of NDTV be issuing a statement in your defence? The Company Secretary is supposed to protect the interests of the company, the shareholders and ensure all laws are complied with, i. e. he is a Compliance Officer and not subservient to the promoters of a public listed company. To conclude, as individuals, you should rebut the charges made by the SEBI order in your personal capacity and you are welcome to approach the appropriate judicial forum (SAT/ HC/ SC) for redressal. You cannot use NDTV or its resources to protect you, the individual. It has to come from your pocket.
The SEBI order is very specific about ruling that the Roys are not fit and proper to be officers of not just NDTV but any other company! A notification should have been issued immediately by them to this effect. Otherwise, the stock will go into free fall and hurting the long-suffering shareholders even more.
Independent Directors of NDTV
It is your responsibility to ensure that the management succession in NDTV is a smooth and efficient one, thereby gaining the confidence of the company, investors, bankers and the markets. The show must go on – except perhaps with news that has a reliability co-efficient closer to 1.
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