SAT quashes Sebi order against NDTV founders Prannoy and Radhika Roy

In a relief for former promoters of NDTV, the Securities Appellate Tribunal (SAT) on Thursday quashed a SEBI order that barred Prannoy Roy and Radhika Roy from the securities market for two years in an insider trading case.

In November 2020, Sebi prohibited Roys from the securities market for two years and also directed them to disgorge illegal gains of more than Rs 16.97 crore for indulging in the insider trading case. The directions followed a probe conducted by the markets regulator between September 2006 and June 2008 wherein violations of insider trading regulations were found. SAT in its order said that the information around which the trades were done by the Roys was not price-sensitive information. SAT even noted that Prannoy Roy and Radhika Roy are not insiders.

The Roys had secured pre-trade clearance from the Compliance Officer of NDTV and therefore, the trades executed by these two individuals were in conformity with the NDTV Code of Conduct and the PIT (Prohibition of Insider Trading) Regulations, the tribunal said.

“There is no finding in the impugned order to the effect that the Compliance Office had acted improperly in granting permission to these entities to sell during the period when the trading window was closed,” a bench consisting of Justice Tarun Agarwala and presiding officer Meera Swarup said in their order passed on Thursday.

Consequently, the appellate tribunal said that “the impugned order passed by the WTM (Whole Time Member) against Prannoy Roy and Radhika Roy cannot be sustained”. However, the appellate tribunal partly set aside an order against Vikramaditya Chandra, the group’s chief executive officer during the relevant period, and remitted the matter back to Sebi to decide the issue.