Stephen Covey wrote, “When we pick up one end of the stick, we pick up the other end.” In other words, all our actions (or inactions) have an effect, intended or unintended. However, at present in India and more so with certain Regulators, we clearly contradict or choose to ignore the basic principles of justice and apply the law as per convenience or at times with some ulterior motive or influence that is not known.
It’s time to visit the Basic Law of Polarity and act without fear or favor against both ends!! Sir Isac Newton had correctly revealed that any action has an equal and opposite reaction; i.e. forces come in pairs.
Securities Exchange Board of India (SEBI) (in)action on NDTV Promoters matter is exactly opposite to the basic principle of justice. Whenever two parties sign an illegal agreement or get into an arrangement, it is but obvious that both are guilty and thus law should deal with them accordingly. However, in NDTV matter, SEBI has chosen to take action against Vishvapradhan Commercial P. Ltd. (VCPL) by issuing them a show cause notice and referring the matter to its Enforcement Division but conveniently forgot about the other signatories and parties to the agreement i.e. Prannoy Roy, Radhika Roy & RRPR Holding P Ltd. The latest communication sent out by SEBI says:
“4(b) With regard to change in control of NDTV it may be noted that proceedings against Vishvapradhan Commercial P Ltd. under Section 11(1), 11(4) and 11B of SEBI Act 1992 and Regulations 44 and 45 of SAST Regulations, 1997 read with corresponding provisions of Regulations 32 and 35 of SEBI (SAST) Regulations, 2011 have been initiated for failure to make public announcement pursuant to change in control in NDTV as required under Regulation 12 read with Regulation 14 of SAST Regulations, 1997 for which Show Cause Notice was issued on December 20, 2016.”
Wait!!! Mr. SEBI, what about Prannoy Roy and Radhika Roy? Didn’t they sign off the illegal change in control and sold their stake on the sly to VCPL? According to an eminent securities lawyer (and plain common sense), the Roys are guilty of fraudulent practice (FUTP), willful concealment of price sensitive information and more importantly insider trading (PIT) as they have signed off and shared unpublished price sensitive information when they transferred control. Not only that, they valued the company (NDTV) at Rs. 1346 crores when the prevailing market value was 800 crores and thus pocketing a cool 70% control premium. This is nothing but cheating of its minority shareholders and of course flouting the Ministry of Information and Broadcasting (MIB) regulations that say prior permission is needed before a change of control of a news media organisation can take place.
Now let’s take up another issue here. Mr. SEBI, you have had information on the above VCPL transaction and many other unimpeachable evidence and documents submitted by a shareholder – Quantum Securities P Ltd. that confirm insider trading, fraudulent trades and of course non-disclosure/ willful concealment of information from BSE, NSE, and SEBI. After 3 years of chasing you, you left the shareholder no option but to approach the Delhi HC for justice as complaints were never attended and more importantly, you denied him his fundamental right to a personal hearing in Bombay at a time and date of your convenience. After making over a dozen requests and phone calls, he sought justice from the Delhi High Court and in January, the Judge quite fairly understood his plea and passed the following orders on January 17, 2017:
“Learned Senior Counsel for the petitioner submits that the petitioner be permitted to make a detailed representation thereby making available to the Board all material and evidence that the petitioner has and be also granted an opportunity of personal hearing so that petitioner can make a representation of his case before a final decision is taken by the Board. Learned ASG appearing for the respondent seeks time to take instructions. At request, renotify on 02.02.2017” (WPC 11148/2016)
However, lo and behold, the Assistant Solicitor General (ASG) Sanjay Jain) has neither got back to the Court with an affidavit nor has SEBI written to the shareholder except the letter communicating the show cause notice to the acquirer on July 21, 2017. We sincerely hope that before the year is over, Mr. SEBI does wake up and let the investor (for whom it has been set up) get an audience and also take action against the Roys on all issues pending since 2013-2014 on insider trading, fraudulent trades etc. Or is it that you are scared of a Minister who may have given instructions not to touch the most “Trusted” media house in India and of course the other “holy cows” such as – Goldman Sachs & Co., General Atlantic Partners LLC and ICICI Bank etc.
SEBI is in possession of cogent evidence of Insider trading, securities fraud and willful concealment of information in substantially large deals with Goldman Sachs & Co., ICICI Bank and also General Atlantic Partners besides the change of control deal with VCPL. It’s completely shocking that neither SEBI is acting nor are they giving an opportunity to the complainant and investor to be heard so as to provide explanations and further submissions and if required, statements under oath as per law to SEBI.
It’s time to visit the Basic Law of Polarity and act without fear or favor against both ends!! Sir Isac Newton had correctly revealed that any action has an equal and opposite reaction; i.e. forces come in pairs. Because the purpose of the universe is equilibrium and synchronicity.
If the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) have the courage, what or who is stopping SEBI? Why only action against VCPL and not the other counterparty – Prannoy and Radhika Roy? Does this have any connection to a Minister who we all know has met Prannoy sometime back?