Case Law Details
In Re. Mr. Prannoy Roy & Mrs. Radhika Roy (SEBI)
It is a fact on record that Mr. Prannoy Roy was the Managing Director/Promoter and Mrs. Radhika Roy was the Chairman/Promoter of NDTV during the UPSI period and were in possession of the UPSI (PSI-6). That the Noticees have purchased 4835850 shares of NDTV while in possession of an UPSI-6 during the UPSI period and have sold shares of NDTV within 24 hours of public disclosure of the said price sensitive information (PSI) to the stock exchanges is borne out of undisputed facts. But for their purchases of those 4835850 shares on December 16, 2007, while in possession of UPSI, which triggered the obligation of open offer, there would not have been any necessity for the Noticees to enter into the sale transaction of NDTV shares on April 17, 2008. Thus, unquestionably the imputed insider trading of December 16, 2007 had a direct link with the sale transaction of April 17, 2008 (pursuant to a trigger of open offer under the Takeover Regulations, 1992) as those purchases of shares of NDTV made on December 16, 2007, led to the consequent sale of shares on April 17, 2008. Admittedly, the Noticees had traded only in the shares of NDTV during the UPSI period (i.e., September 7, 2007 to April 16, 2008) and were part of the decision making chain that had led to crystallization of the UPSI (PSI-6) on September 07, 2007. Under the circumstances, the plea taken by the Noticees – first by arguing that the PSI-6 pertaining to reorganization of the Company did not fall within the ambit of regulation 2(ha)(ii) of the PIT Regulations, 1992, and then by asserting that various disclosures were made by them while complying with their open offer obligations on their insider trades, are futile. They do not serve to assist or exonerate the Noticees from their liabilities as insiders under the PIT Regulations. I, therefore, find that the Noticees have unambiguously contravened:
(a) Regulation 3(i) and regulation 4 of the PIT Regulations, 1992 read with regulation 12 of the SEBI (Prohibition of Insider Trading) Regulations, 2015 and section 12A(d) and (e) of the SEBI Act, 1992; and
(b) NDTV’s Code of Conduct and regulation 12(2) read with 12(1) of the PIT Regulations, 1992.
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