This is the first in a series of articles we will be coming out with on SEBI’s inaction…
We at PGurus have been writing extensively about The Securities and Exchange Board of India (SEBI)’s inaction in its actions against NDTV. This has been happening for some time now and it bears mention that without resolving these issues, it is unlikely that NDTV ownership will change hands. At least that is what is expected of SEBI, which represents the interests of about 40,000 shareholders of NDTV.
What are SEBI’s functions?
SEBI enforces orderly operation of capital markets primarily through four Regulations passed under the SEBI Act, 1992:
- SAST (Substantial Acquisition of Shares & Takeover Regulations)
- PIT (Prohibition of Insider Trading Regulations)
- FUTP (Prohibition of Fraudulent and Unfair Trade Practices Regulations)
- LODR (Listing Obligations & Disclosure Regulations) i.e. Disclosure/Listing violations
Violations by NDTV Promoters Prannoy James Roy, Radhika Roy, RRPR Holding
Four issues / major events have taken place that require SEBI to enforce the above mentioned regulations and take action against the Promoters. All complaints, evidence and other material are available with SEBI from 2013-2016 and unfortunately no action has been taken by them. Under successive governments, SEBI seems to have its own way of doing (or in this case not doing) things!
To understand the violations better, we have come up with a Table which show the event and the violations that it caused. For instance Column S stands for SAST violation, P for PIT and so on.
|Sl. No.||Description||SEBI Violation|
|1||Insider Trading (PIT violation) with General Atlantic Partners (an FII) that triggered the Takeover Code (i.e. SAST) during the period 11.12.2007 to 30.12.2007||✔||✔|
|2||Fraud and manipulation (Securities Fraud) in transactions and various other actions with Goldman Sachs & Co (Mauritius) during the period 1.2.2008 to 30.7.2008||✔||✔||✔|
|3||ICICI Bank transaction under LODR/ Listing Agreement and FUTP being investigated by the Central Bureau of Investigation (CBI), India||✔||✔|
|4||Insider Trading, FUTP and SAST violations in agreements with Vishvapradhan Commercial P. Ltd. (VCPL) during the period 18.7.2009 to 31.03.2010 that has led to change in Control of the Company and then again transfer of ownership of VCPL to Mahendra Nahata group in 2012. In 2011 DG Investigation Income Tax determined that VCPL is a front for RIL Group. Even Business Standard has written extensively about this.||✔||✔||✔||✔|
It is pertinent to point out that all evidence in the form of illegal agreements signed by the Roys, email exchanges on insider trading and fraud and many other cogent pieces of evidence have been submitted with SEBI since 2014. Further, all documents are also filed and available with SEBI as part of Delhi HC Writ No. 11148 of 2015 (Quantum Securities P Ltd. vs SEBI).
In this series of posts, we will be covering each one of the abovementioned events in some detail.