SAT Scraps Sebi's Insider Trading Order Against NDTV Founders Prannoy Roy and Radhika Roy

The Securities Appellate Tribunal (SAT) has scrapped the insider trading order by the capital markets regulator Securities and Exchange Board of India (SEBI) against NDTV’s Prannoy Roy and Radhika Roy. In November 2020, SEBI had denied entry to former NDTV promoters Prannoy Roy and Radhika Roy to the securities market for two years after finding them guilty of insider trading.

However, SAT revoked the charges against them. SEBI had also directed Prannoy and Radhika Roy to redeem the amount amassed wrongfully – over Rs 16.97 crore – along with 6% interest per annum. It had also denied entry to seven individuals and entities for a period varying from one to two years.

SEBI’s order was based on an investigation conducted between September 2006 and June 2008, which found that Prannoy Roy and Radhika Roy were involved in insider trading.

The Roys were accused of violating insider trading regulations by purchasing NDTV shares during the unpublished price-sensitive information (UPSI) period on December 26, 2007, despite being insiders. The board had decided to evaluate options for reorganizing the company, including splitting it into news- businesses and investments in ‘Beyond News’ businesses, which are currently held through its subsidiary, NDTV Networks Plc.

According to SEBI, Prannoy Roy and Radhika Roy made a gain of Rs 16.97 crore while indulging in insider trading. Prannoy Roy was the chairman and full-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 UPSI.

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