Markets regulator Sebi on Tuesday imposed a penalty of Rs 5 crore on NDTV for its failure to disclose price-sensitive information about VCPL loan agreements. The loan agreements were containing clauses and conditions that substantially affected the functioning of the media company, Sebi said in its order.
The regulator said its probe began after receipt of complaints in 2017 from Quantum Securities Pvt Ltd about an alleged violation of rules by non-disclosure of material information to the shareholders about loan agreements with Vishvapradhan Commercial Private Ltd (VCPL). As per Sebi, a loan amount of Rs 350 crore was borrowed by the promoters of NDTV under the VCPL loan agreement in 2009 to repay earlier loan availed from ICICI Bank and a second loan agreement with VCPL was signed for Rs 53.85 crore a year later.
Further, one of the terms of loan agreements allowed VCPL to indirectly acquire 30 per cent shareholding of NDTV through the conversion of warrants into equity shares of RRPR Holding. These clearly establish that 30 per cent shareholding of NDTV was put at the absolute disposal of VCPL by virtue of the loan agreements, the regulator said.
Prannoy Roy, Radhika Roy and RRPR Holding are promoters of New Delhi Television Limited (NDTV). "The VCPL loan agreements were inherently material and price-sensitive in nature and therefore they are required to be disclosed to the stock exchanges for dissemination to the public so that public shareholders and prospective shareholders could have taken an informed decision," Sebi said in its 37-page order.
The regulator noted that NDTV was aware of such loan agreements with effect from August 5, 2015, which is the date of its board meeting, in which agenda of updating the board about regarding "change of control" issue flowing from VCPL agreements were put forth by promoters. However, the media firm did not make a disclosure about the loan agreements to the stock exchanges and violated the provision of listing agreement, Securities and Exchange Board of India said.
Last week, the regulator imposed a total penalty of Rs 27 crore on NDTV promoters for violating various securities norms by concealing information from shareholders regarding certain loan agreements.