SEBI fines NDTV for disclosure lapses – The Securities and Exchanges Board of India (SEBI) has slapped a fine of Rs. 10 lakhs on media outlet NDTV and Rs. 3 lakhs each on promoters Prannoy Roy and Radhika Roy, as well as journalist and former NDTV CEO Vikram Chandra. The SEBI order follows a probe by the watchdog into an alleged delay in disclosure of an income tax demand of around Rs. 450 crores.
Investigations in the case began on a complaint made by Quantum Securities, a shareholder of NDTV. The complaint says that the news firm did not disclose the Order of Dispute Resolution Panel- II of the Income Tax Department. SEBI had also issued a notice to the erstwhile vice-chairman of the channel, KVL Narayan Rao. However, the proceedings were stopped due to his death. SEBI stated that NDTV was fined because of the violation of clause 36 of the Equity Listing Agreement. The clause requires a listed entity to disclose to the Stock Exchange(s), details of all the events which may have had an effect on the operations of the listed entity as well as ‘price sensitive information’. NDTV had already been penalized to the tune of Rs. 2 crores through a separate proceeding in the same matter.
It is not for the first time that NDTV has fallen into a financial mess. It appears that the most controversial media house of India is in deep water not only due to dismal TRP ratings, but also because of alleged financial irregularities. A number of allegations have been made against NDTV with regard to financial irregularities and murky transactions. According to Pgurus, NDTV was involved in FIPB violations as well during the tenure of Finance Minister P. Chidambaram. Going by this version, the CBI and the ED have discovered that in March 2007, the FIPB under Chidambaram had allowed NDTV to bring in a maximum of Rs. 585 crores from its foreign subsidiaries. However, later on it was discovered by the Income Tax Department that NDTV had illegally brought in Rs. 1200 crores.
NDTV has been on the radar of investigating agencies for all the wrong reasons. It has also faced flak for shoddy reporting. A one-day ban was imposed on it for revealing sensitive information while covering the Pathankot attacks, although it is yet to be enforced. However, the penalty levied for non-disclosure, followed by the current SEBI order, has inflicted irreparable damage on whatever was left of NDTV’s reputation. It will no longer be hated only for its biased and irresponsible reporting, but also for the financial irregularities committed by it.
NDTV can no longer hide behind the shield of victimhood and claim it is being targeted for its anti-Modi tirades. It is true that the media is the fourth pillar of the democracy, but that does not give it a license to engage in financial irregularities and illegal activities. In fact, it creates a moral obligation on media outlets to be upright in financial dealings. The reality of NDTV’s suspicious financial activities is evidenced by the alarming rise in the number of probes initiated and pending against it, spanning a plethora of transactions.