The Indian Securities and Exchange Board (Sebi) has levied a penalty of Rs 5 crore on New Delhi Television Limited (NDTV NSE 2.04%) for not disclosing to public shareholders information on loan agreements with the company Vishvapradhan Commercial Private Ltd (VPCL).
On August 26, 2017, Quantum Securities received a complaint from the capital markets regulator regarding the loan agreement signed between NDTV promoters Prannoy Roy, Radhika Roy, and RRPR Holding—and VCPL.
Sebi subsequently conducted an investigation which revealed that certain clauses related to NDTV were embedded in the loan agreements entered into between RRPR Holdings and VCPL. The deal seemed, prima facie, to be content and price-sensitive, the regulator said.
Sebi claimed that the loan agreements allegedly contained various clauses that were binding on NDTV, in such a way that the interest of its public shareholders could be adversely affected.
VCPL gave RRPR a loan of Rs 350 crore in 2009. This loan was taken from RRPR in October 2008 to repay its previous loan taken from ICICI Bank NSE by 1.67 percent. The regulator said that there was no interest rate on the loan in the VCPL loan arrangement, while the ICICI Bank loan held an interest rate of 19 percent.
One of the provisions of the agreement gave VCPL the right, at any point in time, to covert warrants on RRPR shares. This clause allowed VCPL to acquire NDTV’s 30 percent shareholding indirectly.