(a) Communications not legally permissible: QSL and SD are legally restrained/ injuncted from, in any manner, further issuing any defamatory letters, notices, emails, etc., in connection with and / or pertaining to and / or relating to NDTV, its senior officials and promoters vide order of injunctions passed by the Hon'ble Bombay High Court. The said injunction orders continue to operate against SD and QSL till date. Thus, any communication by SD and QSL which is contrary to the above is not legally permissible.
(b) Contempt proceedings against SD and QSL: Due to repeated breach of such injunction orders by QSL and SD, contempt proceedings were also initiated against them wherein the Hon'ble Bombay High Court vide its order dated February 26, 2014 stated that a prima facie case had been made out for issue of contempt notice and directed that a contempt notice be issued inter alia upon the QSL and SD.
(c) However, despite such notice being issued to SD and QSL they have continued to write to third parties making defamatory allegations against NDTV. You are advised to bring any such communication received from SD or QSL to the attention of NDTV and not in any manner inadvertently aid and abet SD or QSL in causing further breach of the injunction and acting in contempt of court.
1. Please note that the Company, its management and its promoters have throughout acted in compliance with law and in the best interests of all the stakeholders of NDTV. QSL and SD, in their defamatory tirade against NDTV, have also approached various regulators, before whom they have raised various allegations and complaints against NDTV. However, the regulators have till date neither found any such allegations to be true nor have they held NDTV in violation of any law. In fact, upon receipt of NDTV's responses on the frivolous and baseless allegations raised by QSL/ SD, the regulators have not taken any action against NDTV. NDTV therefore believes that the regulators have found the responses provided by NDTV to be sufficient.
2. QSL and SD have, in addition to the regulators, also approached various business associates, third parties and the world at large with similar baseless and frivolous allegations. NDTV had initiated action before the Hon'ble Bombay High Court in order to safeguard its interests against such actions by QSL & SD.
3. While SD and QSL have continued to write to various regulators and to third parties, the Company has repeatedly provided its responses to the same and brought the true, correct and complete facts before the authorities and third parties before whom the baseless and frivolous allegations have been made against the Company, its officer and Promoters. However, SD and QSL's actions continue unabated. Accordingly, the Company would like to bring to your attention a brief background of the association of QSL and SD with the Company and more pertinently various regulatory and court orders operating against them. The Company deems this necessary as SD and QSL continue to make various allegations to the regulators and third parties with the sole intention to defame the Company under the garb of a minority shareholder despite specific injunctions and court orders operating against them prohibiting them from doing so. Therefore, this background may assist your good self to appropriately deal with any communications already received/ received in the future from QSL/ SD against NDTV in a manner that your good office does not inadvertently assist QSL/ SD in violating the orders operating against them.
4. Here is a summary of the contents of this communication detailing the various orders, injunctions and findings against SD and QSL (however, please do read this document in full for your own interests):
i. Investigation on SD, his relative and QSL by SEBI for market manipulation, settled with a consent order - SD and his related companies have been investigated in the past for market manipulation by SEBI. SEBI had initiated proceedings against QSL, SD and his wife for violations of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003, which have been settled by him by giving an undertaking to SEBI and passing of consent orders dated January 14, 2013 ("SEBI Orders").
ii. Insider Trading Complaint filed by NDTV inter alia against SD and QSL - Once NDTV became aware of the SEBI Orders, the Company asked QSL and SD if such trades were undertaken in the NDTV scrips as well having access to UPSI. In the absence of any response from QSL or SD, the Company undertook internal inquiry followed by a compliant to SEBI intimating them of such trading activities and requesting an investigation into the affairs of SD, his family members and his companies.
iii. Injunctions by the Hon'ble Bombay High Court (the "Hon'ble Court") against SD and QSL - The Hon'ble Court granted reliefs to NDTV vide its order dated August 6, 2013, August 13, 2013 and October 17, 2013 (the "Injunction Orders") in terms of which QSL and its directors, including SD, were restrained from, in any manner, further issuing any defamatory letters, notices, emails, etc., in connection with and / or pertaining to and / or relating to the Plaintiff, its senior officials and promoters. The Injunction Orders continue to operate against him till date.
iv. Contempt of Injunction Orders by SD and QSL- Despite the Injunction Orders QSL and SD, continued to write defamatory allegation to third parties. The Company once again approached the Hon'ble Court by initiating contempt proceedings against inter alia QSL and SD. The Hon'ble Court vide its order dated February 26, 2014 ("Contempt Order") stated that a prima facie case had been made out for issue of contempt notice and directed that a contempt notice be issued inter alia upon the QSL and SD. Accordingly, the Contempt Notice dated March 7, 2014, (the "Contempt Notice" and collectively with the Injunction Orders and the Contempt Order the "Court Orders") was issued upon the QSL and SD by the Hon'ble Court directing them to show cause as to why appropriate action shall not be taken against them under the provision of the Contempt of Court Act, 1971.
v. Withdrawal of proceedings by SD - SD had also approached the Hon'ble Delhi High Court vide a writ petition against the regulatory authorities (MIB, MCA and Ministry of Finance) seeking inter-alia a writ of mandamus asking them to take action against the Company. However, after receiving objections from the respondents therein, he ceased to pursue his case and withdrew the petition.
Background of SD5. SD and his associate, one Mr. Sanjay Jain were closely associated with NDTV in the capacity of remunerated consultants, from September 2006 up till June 2008. SD and his employee undertook various foreign trips on behalf of the Company and significant expense was incurred by the Company on the aforesaid trips. SD was responsible for the financial affairs and business strategy of the company during the period of his association with the Company and he was responsible for the Company's decision to set up structure of overseas subsidiaries for its foray into non-news areas, during the said period. However, the Company's reliance on SD reduced due to difficulties faced in working with him. As a result, he finally left the organization in July 2008, when the last payment of remuneration was made to him
SEBI Investigation on SD, his relative and QSL for market manipulation, settled with a consent order
6. Thereafter, in or about 2013, NDTV found out that SEBI had initiated proceedings against QSL, SD and his relative for violations of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 and further that the same were settled by QSL and SD inter alia by giving an undertaking to SEBI (relevant consent orders from SEBI attached, for ready reference). It may be noted that in the given case QSL, SD and his relative paid an aggregate amount of Rs. 53.41 Lacs to SEBI to settle and close the investigations and proceedings in an investigation matter of market manipulation against them.
Insider Trading Complaint filed by NDTV inter alia against SD and QSL 7. SD was associated with NDTV and during his association. He was privy to considerable amount of unpublished price sensitive information regarding the Company. Also, QSL had, during the period, carried out various trades in the shares of NDTV. Therefore, the Company became concerned about the motives in acquiring huge stocks of the Company by parties connected to SD, including by QSL. Accordingly, upon becoming aware of the SEBI Orders, NDTV asked QSL and SD to confirm that the trades carried out by QSL in the shares of NDTV were in compliance with law, including the insider trading regulations of SEBI. However, instead of responding to the Company's queries QSL/ SD resorted to writing to various regulators including the MCA, the RoC, RBI and SEBI making frivolous and baseless allegations against NDTV. In the absence of any response from QSL or SD, the Company undertook internal inquiry in order to asses any prima facie malpractice in dealing of its securities inter alia by QSL and SD. Upon coming across certain evidence against QSL and SD, the Company wrote to SEBI intimating them of such trading activities and requesting an investigation into the affairs of SD, his family members and his related companies.
8. Thereafter, instead of ensuring the Company that the trades carried out by QSL in its shares were carried out in compliance with all applicable laws or protecting its interests before SEBI, QSL and SD wrote to various third parties, including to business associates, bankers, auditors, etc., of NDTV continuing their tirade of making baseless and frivolous allegations against NDTV in the garb of investor protection.
Injunctions by the Hon'ble Court against SD and QSL
9. NDTV was therefore constrained to initiate defamatory action against QSL, SD and the other directors of QSL before the Hon'ble Court. The Hon'ble Court, vide the Injunction Orders granted an injunction against QSL, SD and the other Directors of QSL from directly of indirectly, in any manner further issue similar defamatory letters, notices, emails, etc., in connection with and / or pertaining to and / or relating to NDTV, its senior officials and promoters. The Injunction Orders continue to operate till date. The Injunction Orders are public documents and are available on the website of the Hon'ble Court. A copy of the above mentioned orders are annexed hereto for your ease of reference. Further, the relief specified in the said orders is extracted below for ease of reference: "that pending the hearing and final disposal of the Suit, the Defendants and each of them (by themselves and by / through their servants, employees, affiliates, associates and agents) be restrained, by order and injunction of this Hon'ble Court, from in any manner further issuing any defamatory letters, notices, emails, etc., in connection with and / or pertaining to and / or relating to the Plaintiff, its senior officials and promoters;"
10. Therefore, any correspondences already issued by QSL/ SD (or that may be issued in the future) to your good self making unsubstantiated, baseless and frivolous allegations against NDTV, its senior officials and promoters are in violation of the above mentioned directions of the Hon'ble Court. The Company requests your good self to take necessary actions so that QSL/ SD does not use/ misuse your good self in violating the specific directions of the Hon'ble Court.
Contempt of Injunction Orders by SD
11. Even after the above mentioned directions were issued by the Hon'ble Court inter alia against QSL and SD, they continued to write to various third parties and business associates of NDTV, which according to NDTV, were in gross violation of the orders of the Hon'ble Court. NDTV initially approached QSL and SD to cease and desist from writing to such individuals and organizations in violation of the orders of the Hon'ble Court. However, upon failure on the part of QSL and SD to abide by the directions of the Hon'ble Court even after continuous requests, NDTV was constrained to initiate contempt proceedings inter alia against QSL and SD. The Hon'ble Court vide the Contempt Order stated that a prima facie case had been made out for issue of contempt notice. It further directed that a contempt notice be issued upon the QSL and SD (a copy of the said order is attached for ease of reference). Accordingly, the Contempt Notice was issued upon the QSL and SD directing them to show cause as to why appropriate action shall not be taken against them under the provision of the Contempt of Court Act, 1971. The relevant extract from Contempt Order dated February 26, 2014 is as below:
"Having regard to the nature of the allegations made, a prima-facie case for issuance of the contempt notice is made out by the Petitioner. The publication of defamatory allegations concerning the Petitioner, its senior officials and promoters in any manner is prohibited under the orders of this Court referred to above. That includes publication even to the independent directors as well as authorities. The allegations by themselves seem to be prima facie defamatory of the Petitioner, its officers, promoters. The Respondents will have to deal with the various allegations by filing a detailed reply." (emphasis supplied)
12. Accordingly, although the defamation suit and the contempt proceedings are both presently sub-judice, the Hon'ble Court has made prima facie findings and have issued necessary directions upon QSL, SD and the other Directors of QSL. However, QSL/ SD seem to have chosen to ignore such directions which would be in contempt of court.
Withdrawal of proceedings by SD
13. Further, SD had also approached the Hon'ble Delhi High Court vide a writ petition against the regulatory authorities (MIB, MCA and Ministry of Finance) seeking inter-alia a writ of mandamus asking them to take action against the Company. However, after receiving objections from the respondents therein, he ceased to pursue his case and withdrew the petition.
Court Orders on further acts of contempt14. However, despite such strict orders being issued against SD and QSL including prima facie findings by the Hon'ble Court of contempt of the Injunction Orders, they continued on their defamatory tirade against NDTV. They continued to write to third parties including to the bankers of NDTV. Further, in a gross and blatant breach of the orders of the Hon'ble Court, QSL published the Advertisement carried in the 'The Economic Times' on October 30, 2014 making further defamatory allegations against NDTV. NDTV immediately sent its response to the allegations contained in the said Advertisement to the stock exchanges which was uploaded on the website of NSE on October 30, 2014 as well.
15. In light of this absolute disregard of the Contempt Orders by SD and QSL, NDTV was constrained to once again move the Hon'ble Court to bring the above violations to its notice and seek appropriate reliefs on October 31, 2014. The Hon'ble Court after appraising the latest acts of defamation and contempt by QSL was pleased to direct that a further notice of contempt be issued upon \QSL and its directors in light of the recent acts, which were prima facie in violation of the Contempt Orders. The Hon'ble Court further directed that the respondents (i.e. QSL and its directors including SD) are restrained from issuing or publishing any defamatory content against NDTV. The Respondents are now required to personally appear before the Hon'ble Court and show cause as to why action should not be taken against them.
16. SD and QSL's actions of making defamatory allegations to third parties against NDTV are not legally permissible and are in complete disregard of court orders on the following grounds:
(a) As stated above SD and QSL are injuncted by the Court Orders from defaming the Company, its Officials and Promoters;
(b) SD has raised such allegations before various forums. He has been forced to withdraw his allegations when faced with true and correct responses to his allegations as mentioned above where his counsels withdrew the proceedings before the Delhi High Court to avoid an adverse order; and
(c) While SD claims to be an ordinary minority shareholder in his complaints it is clear from the SEBI Orders as provided above that he and his companies are infact sophisticated investors who have been in the past investigated by SEBI for major market manipulation matter for entering into cross and synchronized deals on behalf of its clients and aiding and abetting its main clients to create artificial volumes. SD and QSL in fact availed of the consent mechanism of SEBI to avoid adverse orders and were required to pay sums specified in the SEBI Orders (as attached herewith) towards the terms of consent. It is pertinent to note that SEBI infact found market manipulation in such matters.