Media firm NDTV's promoters Prannoy Roy and Radhika Roy have moved the Bombay High Court, challenging a show-cause notice issued to them by the Securities and Exchange Board of India (SEBI) in 2018 for alleged violation of insider trading regulations.
The court, while stating that it will pass orders on January 6, said the Roys could "face the notice" and attend hearings before SEBI. The petition sought that the court set aside the notice and direct SEBI to allow the Roys to inspect all the documents, records and internal files and notings on which the regulator had relied before issuing the same.
The capital market regulator issued the notice on August 31, 2018, accusing the Roys of trading shares of NDTV while in possession of "unpublished price sensitive information".
The notice accused them of violation of the "Prohibition of Insider Trading Regulations". The petition said the notice was "arbitrary, unreasonable and issued in gross abuse of power".
SEBI offered no evidence or documentation to substantiate the allegations, the Roys said in the plea. It came up for hearing before a division bench of justices SC Dharmadhikari and RI Chagla on Thursday.
After hearing the brief arguments, the bench said the petitioners could face the notice and attend hearings before SEBI. "Face the notice. If as you say there is no material, then it (notice) will fall on the ground," the court said.
The judges said they would pass appropriate orders on the petition on January 6. The notice pertains to a proposed reorganization and restructuring of NDTV into news-related businesses and investments in "beyond news businesses" in 2008. "The proposal was eventually not implemented," the petition said.