TaxTMI 
TaxTMI 
2023 (2) TMI 1307
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....ay Dutt in violation of Section 12A(d), (e) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as 'SEBI Act') read with Regulations 3(ii) and 4 of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 (hereinafter referred to as 'PIT Regulations, 1992') and Regulation 12 of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (hereinafter referred to as 'PIT Regulations, 2015'). Rest of the appellants besides in violation of Section 12A(d), (e) of the SEBI Act were also found in violation of Regulations 3(i) and 4 of the PIT Regulations, 1992 and Regulation 12 of the PIT Regulations, 2015. 2. In essence, the learned WTM found that all the appellants except Sanjay Dutt had made a wrongful gain of Rs. 2.2 crore by making insider trading in the shares of New Delhi Television Ltd. (hereinafter referred to as 'NDTV' or 'the company'). Therefore, the respective appellants were directed to disgorge the said amount jointly and severally with an interest at the rate of 6% per annum from April 17, 2008 till the date of actual payment. Further, all the appellants were restraine....
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....e company in areas beyond news to develop NDTV into a bouquet of channels with entertainment and lifestyle and initiate a major thrust in New Media including the internet. July 31, 2006 October 17, 2006 17:58:34 (NSE) October 17, 2006 19:06:47 (BSE) July 31, 2006 to October 17, 2006 PSI-2: Strategic alliance with Karan Johar and Dharma Productions Private Limited, for the Company's entertainment business September 21, 2006 November 29, 2006 09:48:38 (NSE) November 29, 2006 13:49:09 (BSE) September 21, 2006 to November 28, 2006 PSI-3: The Company signed an agreement with Comventures VI, L.P, a venture capital fund, for investment of US$ 20 million from Comventures in of NDTV Network Plc for funding of its non-news businesses November 22, 2006 March 12, 2007 11:35:08 (NSE) March 12, 2007 11:07:27 (BSE) November 22, 2006 to March 11, 2007 PSI-4: Closure of the Bonds transaction, pursuant to which NDTV Network Plc had issued Step up coupon convertible Bonds and raised an amount of US$ 100 million for funding the operations of its subsidiaries in India March 22, 2007 May 31, 2007 14:21:48 (NSE) May 31, 2007 13:42:56 (BSE) March 22, 2007 to Ma....
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....ctive appellants is as under :- Trading details of Net Buyers Name UPSI period pertaining to Net Buy Quantity Average Buy Price (Rs.) based on actuals Closing Price on the day announcement of PSI at NSE (Rs.)* Wrongful gain (Rs.)# A B C D = A x (C-B) Prenita Dutt PSI - 6 25000 404.71 411.10 1,59,750.00 Prenita Dutt Total 25000 - - 1,59,750.00 QSPL PSI-6 1000 408.00 411.10 3,100.00 QSPL Total 1000 - - 3,100.00 SREPL PSI -1 261569 191.71 220.50 75,30,571.51 PSI- 2 350000 231.09 230.35 (2,59,000.00) PSI-3 240000 238.64 287.75 1,17,86,400.00 PSI-4 10000 304.99 396.90 9,19,100.00 PSI-6 48546 379.11 411.10 15,52,986.54 SREPL Total 910115 - - 2,15,30,058.05 Grand Total 931115 237.72 2,16,92,908.05 Trading details of Net Sellers Name UPSI period pertaining to Sell Quantity Average Sell Price (Rs.) based on actuals Opening Price (Rs.) UPSI period starting day at NSE Wrongful gain A B C D = A x (B-C)....
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....or as to whether it can be inferred that appellant Sanjay Dutt had communicated any of the informations what strikes us clearly is that PSI No. 6 as detailed in the Table no. 3 cannot be called as a PSI. To repeat this PSI-6, is to the effect that the board decided to evaluate options for reorganization of the company which could include the demerger / split of the company into news related businesses / investment in "beyond news businesses" which was then held through its subsidiary, NDTV Networks Plc. The definition of UPSI in Regulation 2(ha) of the PIT Regulations 1992 is as under :- "(ha). "price sensitive information" means any information which relates directly or indirectly to a company and which if published is likely to materially affect the price of securities of company. Explanation - The following shall be deemed to be price sensitive information:- (i) periodical financial result of the company; (ii) intended declaration of dividends (both interim and final); (iii) issue of securities or buy-back of securities; (iv) any major expansion plans or execution of new projects; (v) amalgamation, mergers or take....
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....ed March 1, 2017, resolved to invest its surplus funds by way of loan to IIL or to buy it. Further, discussion on grant of loan continued on January 24, 2017. In principle, it was agreed to go through the transaction of loan. Thereafter, however in the EGM of IIL, it was decided to purchase the shareholding of ILPL. Thereafter, a definite agreement dated March 14, 2017 for sale and purchase of this entity ILPL to IIL was entered into. The learned WTM, in that case held that the resolution passed on July 15, 2017 was only raw information and there was no crystalized offer to identify purchaser. The learned WTM held that the UPSI came into existence on January 24, 2017. It was a date on which in fact a discussion regarding grant of loan was held and there was nothing to say just that any offer for purchase of ILPL was made by the relevant parties. This tribunal finding that till February 3, 2017 there was no talk of purchase did not agree with the findings of the WTM that UPSI relating to sale/purchase came into existence prior to it. 16. Alleged PSI-6 therefore cannot be termed as PSI. Taking this into consideration, if we consider trading details of the respective appellants as ....
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....all the other submissions made by the appellants, we find that the learned WTM has not dealt with the submissions that none of the trades was motivated by any of the PSI / UPSI. The appellants had pleaded that the trades were carried in ordinary course of business. The relevant appellants had large number of trades in various shares during the relevant period and the trades in NDTV were comparatively miniscule. Learned WTM vide paragraph no. 54 onwards had dealt with this issue. However, relying on the strict interpretation of Regulation 3 of the PIT Regulations, 1992 he held that when the insider merely trades in the stock of a company when he or she has access to the PSI the act of insider trading is complete. The learned WTM, therefore, refused to go into the issue as to whether the impugned trades were motivated by the PSI/ PSIs or not. 21. Regulation 3 of the PIT Regulations, 1992 is as under :- "3. No insider shall- (i) either on his own behalf or on behalf of any other person, deal in securities of a company listed on any stock exchange when in possession of any unpublished price sensitive information; or (ii) communicate or counsel or procure d....