Sebi fines NDTV Rs 5 crore for loan agreement disclosure lapses
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On August 26, 2017, the capital markets regulator received a complaint from Quantum Securities relating to loan agreement signed between promoters of NDTV Prannoy Roy, Radhika Roy and RRPR Holding and VCPL. Subsequently, Sebi conducted an investigation which revealed that the loan agreements entered between RRPR Holdings and VCPL contained certain clauses related to NDTV. Prima facie, the deal appeared to be material and price sensitive, the regulator said.
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Securities and Exchange Board of India(Sebi) has imposed a penalty of Rs 5 crore on New Delhi Television Limited(
Markets regulator Sebi on Thursday imposed a total penalty of Rs 27 crore on NDTV promoters, Prannoy Roy and Radhika Roy, as well as on RRPR Holding for violating various securities norms by concealing information from shareholders regarding certain loan agreements. RRPR Holding is a promoter entity of New Delhi Television Ltd (NDTV). According to Sebi, certain loan agreements had clauses that have adversarial effect on the NDTV shareholders. The regulator said its probe began after receipt of complaints, in 2017 from Quantum Securities Pvt Ltd a shareholder of NDTV about an alleged violation of rules by non-disclosure of material information to the shareholders about loan agreements with VCPL.
One loan agreement was with ICICI Bank, and two were with Vishvapradhan Commercial Private Ltd (VCPL).
As per Sebi, an agreement was signed in 2009 with VCPL for a loan of Rs 350 crore to repay the ICICI Bank loan and a second loan agreement with VCPL was signed for Rs 53.85 crore, a year later.
These loan agreements included clauses and conditions that substantially affected the functioning of NDTV, Sebi said in its 52-page order.
Further, one of the terms of loan agreements allowed VCPL to indirectly acquire 30 per cent shareholding of NDTV through conversion of warrants into equity shares of RRPR Holding.