ADVERTISEMENT

CBI Books NDTV’s Roys, Former CEO for Alleged FDI Norms Violation

The CBI has also booked the media outlet’s former CEO under charges of criminal conspiracy, cheating and corruption.

Updated
India
4 min read
The CBI has booked NDTV promoters Prannoy Roy and his wife Radhika Roy in connection with the alleged violation of foreign direct investment rules.
i

The CBI has booked NDTV promoters Prannoy Roy and his wife Radhika Roy, among others in connection with the alleged violation of foreign direct investment rules, PTI reported on Wednesday, 21 August, quoting officials.

The investigating agency has also booked the media outlet's former CEO Vikramaditya Chandra under charges of criminal conspiracy, cheating and corruption, officials reportedly said.

The CBI searches are on at Chandra’s residence in Delhi, sources told The Quint.

It is alleged that the company floated 32 subsidiaries in several tax haven countries to bring foreign funds to India through sham transactions, according to officials.

Under the CBI scanner are investments made by NCBU, a General Electric company at the time, and Network PLC (NNPLC), an NDTV company incorporated in London on 30 November 2006, PTI reported.

The CBI has alleged that NNPLC in 2009 got approval from the Foreign Investment Promotion Board (FIPB) board in violation of FDI rules.

ADVERTISEMENT

NDTV later released a statement saying that the company’s founders have cooperated in all matters filed against them. Read the full statement below:

Despite a series of cases in which the investigation is deliberately stalled, agencies have found no evidence of any corruption by NDTV. Prannoy and Radhika Roy, the founders of NDTV, as also the company, have cooperated in all matters filed against them. As part of the continued persecution of free press, a new CBI case has been filed about a $150 million investment in NDTV's non-news business by NBCU, then owned by General Electric, a massive American conglomerate. The case makes the ludicrous charge that the transaction, declared to all relevant authorities in the US and India, laundered money for unknown public servants.

NDTV and its founders have full faith in India's judiciary at this crucial time and remain committed to the integrity of the company's journalism. Attempts to silence free and fair reportage through malicious and fabricated charges will not succeed. This is not about a company or individuals but about a larger battle to maintain the freedom of the press, something which India has always been renowned for.

WHAT DOES THE FIR SAY?

According to FIR, at the time of NDTV's incorporation, on 8 September 1988, the Roys and Naryanan Rao (a retired IRS officer) were whole-time directors and Chandra was CEO-cum-whole-time director.

"During May 2OO4 to 2010, NDTV floated 32 subsidiary firms, mostly in tax havens, like Holland, the UK, Dubai, Malaysia and Mauritius. Majority of them had no business transaction and were meant only for financial transactions to bring funds from abroad," IANS reported, citing the FIR.

Terming them as sham transactions, the FIR stated that the funds were invested by unidentified public servants through NDTV and later laundered back to India through multiple layers of transactions and shell companies.

“The proceeds of corruption of unknown public servants were invested through NDTV.”

The CBI had initiated preliminary enquiry into the case in 2016 against unidentified income tax officials, the Roy couple, Naryanan Rao and Chandra, IANS reported.

NDTV had also incorporated Network PLC (NNPLC) in London on 30 November 2006. "NNPLC had received $20 million investment through 25,575 convertible preference shares together with 2,558 warrants from Fuse Media Holding in March 2007 for 4.5-5 percent stake. It raised $100 million fresh funds through Jefferies International via step-up coupon convertible bonds in May 2007.

The FIR further said:

“In this transaction, Jefferies had received $5.5 million commission. NNPLC transferred Rs 193,98,44,325 to various subsidiaries of NDTV Group - NDTV Imagine, NDTV Life Style, NDTV Emerging Market, NDTV Convergence and NDTV Labs.”
ADVERTISEMENT

As per the FIR, NDTV incorporated another company in the Netherlands on 10 April 2008 in the name and style of NDTV International Holding for raising $150 million funds from NBCU, a US-based subsidiary of General Electric.

NBCU transferred $150 million from the account of its subsidiary Universal Studios International, Netherland, on 23 May 2008.

The FIR added:

“By investing the amount in NDTV International Holdings, NBCU acquired 26 percent indirect share holding in NNPLC. The said amount was further transferred to the subsidiaries of NDTV incorporated in Mauritius and London, and finally it was received by subsidiaries of NDTV Group - NDTV Imagine, NDTV Lifestyle, NDTV Labs, NDTV Convergence, NDTV NGEN and NDTV Studio - incorporated in India.”

The $100 million investment against step-up convertible bonds were repaid to respective investors by NDTV by making a payment of $72.40 million in November 2008.

Similarly, the $150 million investment by NBCU, which had acquired 26 percent shareholding in NNPLC, was settled by buying back share of NDTV Network International Holding, Netherland, from NBCU after making $12,472,750 payment to Universal Studio on 26 October 2009.

The UK-based NNPLC got the FIPB approval for $130-160 million investment in violation of FDI provisions. Subsequently, NNPLC received $163.43 million FDI till September 2009. It later invested the amount in various subsidiaries of NDTV through a web of complex transaction.

The acts of omission and commission on the part of the Roy couple, Chandra and Naryanan Rao, unidentified public servants and others prima facie disclose commission of cognisable offences under the Indian criminal laws, the FIR added.

(With inputs from PTI, IANS and NDTV)

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

ADVERTISEMENT
Published: 
Speaking truth to power requires allies like you.
Become a Quint Insider
500
1800
5000

or more

PREMIUM

3 months
12 months
12 months
Check Insider Benefits
ADVERTISEMENT
Stay Updated

Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.

Join over 120,000 subscribers!
ADVERTISEMENT