SAT Quashes SEBI’s Insider Trading Order Against NDTV Co-Founders Prannoy Roy and Radhika Roy

New Delhi: The Securities Appellate Tribunal (SAT) has quashed an insider trading order by capital markets regulator Securities and Exchange Board of India (SEBI) against Prannoy Roy and Radhika Roy, the co-founders of NDTV.

The order, issued by SEBI in November 2020, accused them of insider trading and barred them from accessing the capital markets for two years. It had directed them to disgorge the amount wrongfully gained – over Rs 16.97 crore – along with 6% interest per annum.

According to Business Standard, SAT overturned the order, saying that the information scrutinised by SEBI was not price-sensitive, and the Roys were not insiders.

“We find that Prannoy Roy and Radhika Roy received pre-trade clearance from NDTV’s compliance officer, a fact acknowledged in the show cause notice. Therefore, the trades executed by these two individuals were in line with NDTV’s Code of Conduct and the PIT Regulations,” SAT observed, per the business daily.

The issue pertained to trades conducted between September 2007 and April 2008, involving allegations of an illicit gain of nearly Rs 17 crore.

This SAT order vindicates the Supreme Court’s intervention more than two years ago when the top court stayed the SEBI order and ruled that Radhika and Prannoy Roy do not have to pay any fine.

SEBI had on December 24, 2020 imposed Rs 27 crore penalty on the three NDTV promoters – Prannoy Roy, Radhika Roy and RRPR Holding Limited – for failing to disclose price-sensitive information to shareholders of NDTV.

In January 2021, SAT directed the NDTV promoters to deposit 50% of the disgorged amount before SEBI within four weeks.

In February of that year, the Supreme Court directed SAT not to insist on deposit of fines as a pre-condition for hearing their appeals against SEBI’s orders.

On March 27, 2021, the Supreme Court stayed the recovery of penalty on the NDTV promoters.