New Delhi Television (NDTV) fell 1.25% to Rs 39.45 after the Securities and Exchange Board of India imposed a penalty of Rs 5 crore on the company for not disclosing information on loan agreements with Vishvapradhan Commercial to public shareholders.
Sebi imposed a penalty of Rs 5 crore on NDTV under Section 23E of the Securities Contracts (Regulation) Act, 1956 for alleged non-disclosure of the loan agreements entered into in 2009-2010 by the NDTV founders with Vishvapradhan Commercial (VCPL).NDTV stated that journalists Radhika and Prannoy Roy, who are its founders and promoters, continue to hold majority stake with 61.45% of the paid up share capital of the company. There has been no change in control through any arrangements or transactions with third parties. Any report or allegation to the contrary is baseless, it added.
The company said that it will appeal urgently against the Sebi order. NDTV said it was not a party to this arrangement and it disclosed these agreements in 2015 in response to media reports that speculated change in control. The core issue of the alleged surrender of control to VCPL is pending adjudication at the Securities Appellate Tribunal, which, in 2019, granted a stay in favor of the founders of NDTV, which is still in operation.
The company said it has been advised by its lawyers that the Sebi order is based on an inaccurate assessment of facts and will not withstand scrutiny in appeal. NDTV issued the clarification after market hours yesterday, 29 December 2020.
On a consolidated basis, NDTV reported a net profit of Rs 20.54 crore in Q2 September 2020 as compared to a net loss of Rs 10.05 crore in Q2 September 2019. Net sales surged 22.2% to Rs 94.35 crore in Q2 September 2020 over Q2 September 2019.
NDTV is in the business of television media and operates approximately three channels, including a dual channel (NDTV 24x7, NDTV India, NDTV Profit & Prime). The company's segments include television media and related operations, and retail/e-commerce.
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