SEBI bars NDTV promoters for insider trading

Today, Securities and Exchange Board of India barred NDTV’s two promoters, Prannoy Roy and Radhika Roy for two years and directed to disgorge illegal gains of more than ₹16.97 crore for indulging in insider trading more than 12 years ago.

SEBI in total has barred seven individuals and entities for insider trading in the shares of the company for a period varying from one to two years. Also, some of them have been asked to disgorge illegal gains made from trading in the shares when they were in possession of Unpublished Price Sensitive Information (UPSI).


The directions follow a probe conducted by the markets regulator between September 2006 and June 2008 wherein various violations of insider trading regulations were found.

The amount has to be paid jointly or severally by them along with 6% interest from April 17, 2008, till the date of actual payment.

SEBI said in three separate orders passed late on Friday, “All the entities have violated Prohibition of Insider Trading (PIT) Regulations.”

According to the regulators, Prannoy Roy and Radhika Roy together made a gain of ₹16.97 crore while indulging in insider trading in the shares of New Delhi Television Ltd (NDTV) while in possession of UPSI relating to the proposed reorganization of the company.

Prannoy Roy who was the chairman and whole-time director and Radhika Roy was the managing director during the period under investigation and were part of the decision-making chain that had led to the crystallization of the UPSI.

Discussions pertaining to reorganisation of the company started on September 7, 2007, and the disclosure was made on April 16, 2008.

The UPSI period was September 7, 2007, to April 16, 2008

Prannoy Roy and Radhika Roy sold shares on April 17, 2008, when the trading window for them was closed and made a profit of ₹16,97,38,335.

Hence, they violated PIT norms and also acted in contravention of NDTV’s code of conduct for prevention of insider trading which prohibited them from trading at least till 24 hours after the information was disclosed to the stock exchanges.

The Roys are thus restrained from accessing the securities market for two years and directed to disgorge illegal gains along with 6% interest per annum.

Vikramaditya Chandra group CEO and executive director during that period made a profit of ₹6.67 lakh; Ishwari Prasad Bajpai, who was senior advisor-editorial and projects, made an illegal gain of ₹8.82 lakh; while director finance and group CFO Saurav Banerjee incurred a loss of ₹47,000 while trading in NDTV’s scrip during the UPSI period.

SEBI has therefore directed disgorgement of respective illegal gains along with 6% interest per annum and barred Chandra, Bajpai and Banerjee from accessing securities market for one year.

Also, Sanjay Dutt’s wife Prenita Dutt and their entities Quantum Securities Pvt Ltd, SAL Real Estate Pvt Ltd and Taj Capital Partners Pvt Ltd had made a wrongful gain of ₹2.2 crore through insider trading while in possession of UPSI.

Sanjay Dutt was an on-call and in house advisor/team member of NDTV group. He was responsible and accountable for the corporate finance and strategic planning function of the firm.

Due to his position, he was in possession of or has had access to price-sensitive information and had communicated the same to his wife, Prenita Dutt, and entities connected to him Quantum Securities, SAL Real Estate and Taj Capital Partners which, in turn, traded in the shares of NDTV during the UPSI period and made illegal gains of ₹2.2 crore.

Therefore, SEBI has directed disgorgement of the illegal gains which is to be paid by them jointly or severally along with 6% interest and also barred all the entities including Sanjay Dutt from accessing securities market for two years.