SAT stays Sebi's order asking Prannoy, Radhika to step down from NDTV

The tribunal, while adjourning the matter for September 16, directed Sebi to file a reply and gave three weeks to the Roys to file a rejoinder.

The Securities Appellate Tribunal (SAT) on Tuesday stayed an order passed by the Securities and Exchange Board of India (Sebi) barring New Delhi Television (NDTV) promoters Prannoy Roy and Radhika Roy from holding managerial positions at the news television network.

“Such orders prima facie would not be in the interest of the shareholders of NDTV or investors at this stage,” SAT said in an order, adding the company “cannot remain headless.”

The tribunal, while adjourning the matter for September 16, directed Sebi to file a reply and gave three weeks to the Roys to file a rejoinder.

SAT directed the Roys to not alienate or create any encumbrance on their shareholding in NDTV till further orders.

SAT on Tuesday heard the arguments by counsels for Sebi and the Roys.

The tribunal, however, said the various allegations made in the Sebi order had to be considered in detail.

The order in the matter of NDTV pertains to a Rs 350-crore loan taken by holding company RRPR Holding from ICICI Bank, which was later liquidated by taking two more loans from Vishvapradhan Commercial (VCPL).

The loan taken from VCPL was interest-free for 10 years on the condition that VCPL would have a right of first refusal on 50 per cent of NDTV shares in the event they were sold in the market.

The loan agreement had certain call options for transfer of 30 per cent of RRPR shareholding at a price of around Rs 215 per share.

Sebi, in its order dated June 14, said the loan agreement was nothing but a sham agreement, and violated disclosure norms.

The tribunal pulled up Sebi for not supplying a copy of the order to the Roys.

“We find the whole world knows about the impugned order except the appellants.

"To date, they have not been supplied a copy of the impugned order despite the oral direction given by this tribunal yesterday (Monday)...

"Their liability and their onerous duty does not end the moment they upload the order on their website.

"The first duty is to supply a copy of the impugned order to the aggrieved party, which, in the instant case, has not been done to date,” said SAT.

Photograph: PTI Photo