The Bombay High Court on Monday dismissed a petition filed by media firm NDTV's promoters Prannoy Roy and Radhika Roy, challenging a show-cause notice issued to them by the Securities and Exchange Board of India in 2018 for alleged violation of insider trading regulations.
A division bench of Justices SC Dharmadhikari and RI Chagla said the petitioners could face the notice and attend hearings before the Securities Appellate Tribunal.
"It isn't as if the petitioners cannot appear before the tribunal. They (petitioners) can participate in the hearing before the tribunal," the court said.
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regulator issued the notice on Aug. 31, 2018, accusing the Roys of trading shares of NDTV while in possession of "unpublished price sensitive information".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.
The notice pertains to a proposed reorganisation 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.
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