SEBI

& PROMOTERS OF NDTV (Prannoy Roy, Radhika Roy & RRPR Holding)

SEBI enforces orderly operation of capital markets primarily through four Regulations
passed under the SEBI Act:
a. SAST (Substantial Acquisition of Shares & Takeover Regulations)
b. PIT (Prohibition of Insider Trading Regulations)
c. FUTP (Prohibition of Fraudulent and Unfair Trade Practices Regulations)
d. LODR (Listing Obligations & Disclosure Regulations) i.e. Disclosure/Listing
violations

In this matter, four issues / major events have taken place that require SEBI to enforce
these regulations and take action against the Promoters. All complaints, evidence and
other material are available with SEBI from 2013-2016 and unfortunately no action
has been taken by them.
The issues are:
1. Insider Trading (PIT violation) with General Atlantic Partners (a FII) that
triggered the Takeover Code (. i.e. SAST) during the period 11.12.2007 to
30.12.2007 (Page 2)
2. Fraud and manipulation (Securities Fraud) in transactions and various other
actions with Goldman Sachs & Co (Mauritius) during the period 1.2.2008 to
30.7.2008 (Page 3)
3. ICICI Bank transaction under LODR/Listing Agreement and FUTP being
investigated by CBI.
4. Insider Trading, FUTP and SAST violations in agreements with Vishvapradhan
Commercial P. Ltd. (VCPL) during the period 18.7.2009 to 31.03.2010 that has
led to change in Control of the Company and then again transfer of ownership
of VCPL to Mahendra Nahata group in 2012. (Page 4)
It is pertinent to point out that all evidence in the form of illegal agreements signed
by Roys, email exchanges on insider trading and fraud and many other cogent
evidences have been submitted with SEBI since 2014. Further, all documents are also
filed and available with SEBI as part of Delhi HC Writ No. 11148 of 2015 (Quantum
Securities P Ltd. vs SEBI).

1

 GENERAL ATLANTIC (GA) MATTER

Sr.
Date Event/SEBI Violations
No.
Prannoy Roy on behalf of NDTV signs a term sheet/agreement with NBCU
International (GE Co.) in London for selling a 26% stake in NDTV Networks
Ltd. (UK Plc and 100 % subsidiary of NDTV) for USD 150 million dollars. This
1 13 July,.2007
information (mandatory) was not disclosed to Stock
Exchanges/Shareholders/Public and SEBI etc.. i.e. unpolished price sensitive
information (UPSI) intentionally withheld.
Negotiations continued with NBCU to close the transaction based on term
sheet above. However, all details and information is shared about this
13 July to Dec
2 transaction with fund managers of GA, Morgan Stanley etc. and GA fund
2007
manager is totally aware of this unpublished price sensitive information
(UPSI).
GA that held (since 2005) 48.46 lac shares of NDTV sends a draft agreement
specifically mentioning price per share (Rs. 400/-) and number of shares to be
sold to Prannoy Roy and Radhika Roy by email written by Chris Lanning (MD
3 12 Dec, 2007
& General Counsel) in US asking Sunish Sharma, Fund Manager of GA (India)
to send the Agreement to Prannoy and accordingly proceed with the sale
transaction.

Email exchanges/negotiations on timing and mode etc. of executing the deal

continue without any public disclosure between GA, AZB (law firm) and
Prannoy Roy. GA keeps insisting that price is going up and Prannoy is not
12.11.2007 to
4 executing the agreed buy trade of these 48.46 lac shares and it is becoming
25.12.2007
difficult for them to hold on as the pre-agreed price is much below market
price then prevailing. Thus, clear case of fraudulent dealing and insider
trading based on UPSI. All email exchanges etc. are with SEBI as evidence.

Finally, the pre-agreed price of 11.12.2007 is used and a trade of 48.46 lac
shares at 400/- per share was executed on the BSE when the prevailing
market price on the same day was at a major variation. Thus, a pre-meditated
5 26 Dec, 2007
and fraudulent (as not disclosed) was executed as an open market
sale/purchase (declared officially so). Thus, this trade attracts PIT, FUTP and
Disclosure violations of SEBI.

Immediately the Takeover code was triggered and Roys had to announce an
6 26, Dec 2007 open offer to acquire 20% more of the issued capital of NDTV as per SEBI
SAST Regulations (that they did).
They officially made the announcement of open offer for 1.25 crores shares
7 31 Dec, 2007 worth 550/- crores as is mandatory under SAST. Had made a false statement
in the announce that they had resources to do so.
NDTV issued a denial publicly and on BSE website that no such agreement or
arrangement with NBCU has been entered into. Thus, squarely attracting
8 9 Jan, 2008 FUTP Regulations of SEBI. This denial was done as press carried news item
saying from unknown sources a deal had been signed by them with GE Co.
(NBCU).
NDTV makes a formal announcement about the 150 USD million NBCU deal.
9 22 Jan, 2008
Thus, clearly committing disclosure and FUTP violations.

2

 GOLDMAN SACHS & CO MATTER (GS)

Sr.
Date Event/SEBI Violations
No.
As the open offer got triggered post the GA trade of 26.12.2007, the promoter was
compelled to (as per law) make an announcement to acquire (as per SAST) 1.25 crores
1 26 Dec, 2007 shares valued at Rs. 550 crores. Pertinent to note, Promoters had no financial
arrangements for this amount and made a false statutory declaration in the mandatory
notice on 31.12.2007
They began discussions with GS to offload as many shares as possible while at the same
time they had made an offer to buy (commitment as per law) to acquire shares from
2 1 Jan, 2008
public shareholders. Thus, a completely contradictory position to the open offer
announcement.
Many meetings, email exchanges and sharing of unpublished price sensitive information
12 Jan, 2007 took place between Promoters, NDTV official and GS etc. to negotiate a binding term
3 to 7 March, sheet/agreement to offload 14.99% shares. (worth Rs. 420 crores). This illegal deal was
2008 closed by Luthra & Luthra (law firm) and once again never disclosed to SEBI, NSE and
BSE etc..
Binding agreement was signed and not disclosed (as is legally required) to SEBI, BSE &
NSE or public at large. Thus, a clear case of PIT, FUTP & even SAST (as GS becomes
4 7 March, 2008 aperson acting in concert- PAC) as open offer was ongoing and Promoter was on one
hand buying shares and selling to Goldman Sachs i.e. a benami transaction running
concurrent to Open Offer.
By virtue of the above agreement, GS purchased from PR and RR (Roys) 49.13 lac shares
for a consideration of Rs. 213 crores thus pocketing an insider trading gains of Rs. 17
crores. Do note, as on 26.12.2007 they had bought 48.36 lac shares for 194 crores from
GA. This is clearly a case of plain and simple insider trading and fraud on all minority
shareholder since all information was kept undisclosed while promoters made an illicit
gain of Rs. 17 crores. (i.e. in PMLA parlance proceed of insider trading crime)

It is important to note, the agreement of 7.3.2008 had very interesting/illegal covenants
5 17 April, 2008 that are clearly in violation of all SEBI and Listing Agreement (LODR) regulations. For
example appointment of a nominee director of GS, tag along rights, drag along rights,
information rights, restrictive rights as to who NDTV can deal with, GS permission
specifically needed to amend articles and memorandum of association etc. This is a
classic case of fraud, misrepresentation and personal gain (PIT) to promoters at the cost
of Company and without doing any disclosures to not only public at large but also
Ministry of Information & Broadcasting as the licensing authority for news broadcasting
companies. In addition Home Ministry Security clearance as close to 15% share of a
news broadcaster sold to a foreign entity and Director appointment.
Within 4 days of closure of the Open Offer, another 170 crores worth of shares by virtue
of the 7.3.2008 agreement was sold to GS by Roys. This again is covered as a PIT and
6 14 July, 2008
FUTP violation. Do note, as they had not funds, promoter Open offer was funded by
IndiaBulls after much delay and SEBi strictures/threats..

September Heramb Hajarnavis was appointed on the Board of NDTV as an independent director
7
2008 and at no stage he or NDTV stated in his appointment that he is a nominee of GS.

In a filing with Bombay HC, Hajarnavis, goes on to state in a letter that he was a nominee
of certain funds that were managed by GS. This is truly a shocking revelation as it shows
8 30 Aug, 2013 that the funds invested by Goldman were not there but they were acting as a
benami/front for some third party. This makes this suspect political or some other
vested interest money in acquiring stake/control in NDTV.

3

 VISHVAPRADHAN COMMERCIAL P. LTD. & Mahendra Nahata role?

Sr.
Date Event/SEBI Violations
No.
Vishwapradhan Commercial P. Ltd. (VCPL) an existing khoka/shell company comes into the RIL
1 18 July, 2009
fold, having 1 lac paid up capital & no business or assets.
VCPL signs a covert / illegal agreement to acquire 26% stake in NDTV by having the option of
2 21 July, 2009 controlling RRPR Holding P Ltd. (RRPR). RRPR is held 50% each by PR & RR and is a holding Co. of
NDTV (shell Co. that only owned NDTV shares as the only asset and no employee or other asset).
RR and PR transfer 1.15 crores shares of NDTV to RRPR (which by now is controlled by VCPL) at
&3 3 Aug, 2009 Rs. 4/- per share when marked price is 135-140 per share on BSE. This is nothing but a blatant
case of fraudulent, insider and bogus trade, thus violating SAST and all SEBI Regulations.
VCPL paid Rs.. 350 crores to RRPR for irrevocable right/ownership of RRPR & also
complete control on all other shares of PR and RR in NDTV. Thus, effectively RRPR gets
complete control of NDTV i.e. effective control of 61% of voting rights of NDTV. Money
comes into VCPL from another RIL Co. called Shinano Retail P. Ltd and this Rs. 350 crores
stake buy is at a substantial premium (70%) to market price. i.e. agreement mentions
NDTV value at 1346 crores but market cap was 800 crores.
4 7 Aug, 2009 From the above steps (2-3) both PR and RR along with VCPL violate SEBI laws i.e. Insider
Trading, Fraudulent Trades (FUTP), Disclosure Laws and Takeover code (SAST). None of
the above are disclosed to SEBI, BSE, NSE or the shareholders of NDTV.
Agreement of 21.7.2009 further, blatantly violates Ministry of Information and
Broadcasting (MIB) laws applicable to News Cos. It is clearly specified in MIB Regulations
that any change of control requires prior consent of MIB and of course Home Ministry
security clearance for Directors and Management
RR and PR transfer another 3.20% shares of NDTV to RRPR (which is now under RIL/VCPL
control). As established by Income Tax Dept., these are illegal trades as on same day they do buy
5 8 Mar, 2010 and sell trades at Rs. 4/- and Rs. 140/- between RRPR and RR & PR to generate illegal gains of Rs.
130 crores. These transactions squarely attract PMLA, SEBI Insider Trading, FUTP and &
Takeover code regulations.

It is important to note that Rs. 350 crores received as in Point 4 above is the amount RR and PR
6 7 Aug 2009
used to repay the questionable ICICI Bank Loan (under CBI investigation).
Do note, layering/money laundering is clear in this case as Rs. 403.85 crores (Rs. 350 plus Rs.
53.85 crores) is exactly the same amount to the last paisa paid by Reliance Ventures Ltd (RVL). to
Shinano Retail P Ltd. and then onwards to VCPL and finally to RRPR to control NDTV. The sole
7
objective being to hide the actual source of money. It is very much possible that RVL got this from
some other party in India or abroad or maybe some sort of political or illegal money parked
overseas
Further, VCPL had given a statement to DG Investigation Income Tax, New Delhi in May-Jun 2011
that Rs. 403.85 crores were given to RRPR without security & without interest in 2009 August and
as it had an irrevocable option to convert this loan at any time into such number of equity shares
May to June,
8 of RRPR at par so as to own 99.99% of fully diluted equity of the Company (RRPR). Thus, in 2011
2011
itself DG Investigation and SEBI were clear that NDTV control had changed hands from Roys to
RIL group. What clearly evident that some influential person (maybe political) suppressed this
investigation and ensured it was never pursued ahead by ED, SEBI or Income Tax Dept.
More intrigue and blatant illegality takes place in Oct-2012, VCPL, the controlling company of
RRPR and thus NDTV further changes hands and is sold by RIL group to HFCL (Mahendar Nahata)
group. So effectively as of today VCPL and thus NDTV is under legal control of HFCL Group and
one does not know what control/commercial agreements are executed for this. This fact has also
been determined by Income Tax Dept and filed under affidavit in the Delhi HC.

FINALLY, the question remains unanswered, who really controls NDTV and how did so many
illegal actions and alleged dubious fund movements in shell companies took place in a span
of 2 years. If this is not a matter of Insider Trading, Fraud, criminal breach of trust (public
shareholder and public news broadcaster involved) then what would be classified as Insider
Trading, Fraud and blatant violation of Tax laws, FEMA and PMLA.