SAT Sets Aside SEBI Order Which Held Prannoy Roy & Radhika Roy Liable For Insider Trading In NDTV

The Securities Appellate Tribunal (SAT) on Thursday (October 5) set aside the order passed by the Securities and Exchange Board of India (SEBI) in November 2020 which held Prannoy Roy and his wife Radhika Roy, the former promoters of NDTV, liable for insider trading.

The SEBI order had barred the Roys from buying, selling and dealing in securities directly and indirectly for a period of two years. It also directed them to disgorge more than Rs 16.97 crore gained from alleged insider trading in the scrips of NDTV.

The SAT found that Prannoy Roy and Radhika Roy had secured pre-trade clearance from the Compliance Officer of NDTV which is an admitted fact in the show cause notice and, therefore, the trades executed by these two entities was in conformity with the NDTVs Code of Conduct and the Prohibition of Insider Trading Regulations,

The SAT noted that there is no finding in the impugned order to the effect that the Compliance Office had acted improperly in granting permission to these two entities to sell during the period when the trading window was closed.

The SEBI order was based on a probe conducted between September 2006 and June 2008, on a complaint against the news company.After perusing all the records, the Board held that the NDTV promoters made wrongful gains by dealing in company shares, while being in possession of Unpublished Price Sensitive Information (UPSI) pertaining to the proposed reorganization of the company.

The SAT held that the information relating to reorganization of the company was not a "price sensitive information". It held that the impugned order passed by the SEBI WTM(Whole Time Member) against Prannoy Roy and Radhika Roy cannot be sustained. 

Click here to read the SAT Order 1, SAT Order 2.