SEBI bars NDTV promoters Prannoy and Radhika Roy from dealing in securities market for indulging in insider trading

The Securities and Exchange Board of India (SEBI), on Friday, barred NDTV promoters Prannoy and Radhika Roy from dealing in the securities market for alleged insider trading that occured twelve years ago..SEBI also directed them to disgorge illegal gains of over Rs 16.97 crore. NDTV denied the charges, saying that it will immediately appeal against the ruling..The order passed by SEBI read:"If the persons like the Noticees, who are obligated to observe fiduciary duties while exercising their powers fail to do so and instead use their position to their own advantage pecuniary or otherwise, it constitutes a fraud perpetrated on the common shareholders whose trust reposed in them has been blatantly breached. It is, therefore, of paramount importance that trading by the insiders is monitored and regulated, especially when they are in possession of UPSI. Wherever such trading results in accrual of unlawful gain, such insiders are required to forgo such gain. .SEBI, therefore, passed the following orders:(a) Mr. Prannoy Roy and Mrs. Radhika Roy shall, jointly or severally, disgorge the amount of wrongful gain of ₹16,97,38,335 as computed in the show cause notice, along with interest at the rate of 6% per annum from April 17, 2008, till the date of actual payment of disgorgement amount along with interest, within 45 days from the date of coming into force of this order;(b) Mr. Prannoy Roy and Mrs. Radhika Roy shall be restrained from accessing the securities market and further prohibited them from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of 2 years.The order also stated:"It is clarified that during the period of restrain the existing holding of securities, including the units of mutual funds shall remain under freeze in respect of the aforesaid Noticees.".The direction was passed after a probe was conducted by the market regulator between September 2006 and June 2008, wherein various violations of insider trading regulations were found..Prannoy and Radhika Roy were alleged to have amassed profits of almost Rs. 17 crore while indulging in insider trading in shares of NDTV while in possession of unpublished price sensitive information (UPSI) related to the proposed reorganisation of the company..The Roys were found to be in contravention of Regulations 3(i), 4, and 12 of the SEBI (Prohibition of Insider Trading) Regulations, 2015 read with Section 12A(d) and (e) of the SEBI Act, 1992..[Read SEBI Order]