Allegations that the founders of NDTV, Radhika and Prannoy Roy, ceded control of New Delhi Television Limited through a personal loan taken in 2009-10 are "a figment of imagination", "against the material evidence on record" and "wholly erroneous," the Securities Appellate Tribunal (SAT) has ruled in its order dated July 20, 2022 (made available on July 21, 2022).
While declaring completely legitimate the terms of the personal loan between the NDTV founders and a company named Vishvapradhan Commercial Private Limited (VCPL), the verdict says, "The transaction does not acquire direct or indirect control of NDTV. The intent and language of the loan agreement and call option agreements read with the SAST Regulations makes it clear that there is no direct or indirect control of NDTV by VCPL."
With these and other strong observations in favour of the NDTV founders, SAT's verdict overturns an earlier order by SEBI dated June 14, 2019, and states the order which had barred them "from accessing the securities market or from accepting any position of a Director is totally out of context and does not commensurate with the alleged violation especially when no fraud has been committed nor does the loan agreement defraud the investors."
SAT has imposed a penalty of Rs 5 crore on the founders and Rs 10 lakh on the Company for not disclosing the loan agreement in 2009-10 but finds that "such non-disclosure...is neither fraudulent nor found to be an unfair trade practice."