Behind CBI raid on Prannoy Roy’s residence, NDTV loan chain

Since 2008, NDTV promoters Radhika Roy and Prannoy Roy repaid a series of loans from one entity by borrowing from the next lender. As per an investigation report, the ICICI had given NDTV the loan at 19 per cent interest.

Written by Krishn Kaushik | New Delhi | Updated: June 6, 2017 11:11 am
cbi raids NDTV, Prannoy roy, radhika roy, ndtv Outside Prannoy Roy’s Delhi residence Monday. PTI

Monday’s CBI raid on premises of Radhika Roy and Prannoy Roy, promoters of the NDTV group, has its roots in a series of loans the Roys took starting 2008 when they sought to buy back a large chunk of NDTV shares from the market.

After the Roys had bought 7.73 per cent of NDTV shares from General Atlantic in December 2007, it led to an open offer to other minority shareholders. To fund the purchase of shares that the minority shareholders wanted to sell, the Roys created a company, named RRPR Holdings Private Limited after Radhika and Prannoy Roy. RRPR borrowed Rs 501 crore from India Bulls. With the shares of RRPR Holdings and their individual shares, the three promoters controlled the majority of NDTV’s equity.

To cover part of the India Bulls loan, RRPR then borrowed Rs 375 crore from ICICI Bank. The private bank gave RRPR Rs 375 crore in October 2008, as per the deed of hypothecation. But by August 2009, RRPR had found another lender, a company named Vishvapradhan Commercial Private Limited, to repay the ICICI loan.

VCPL agreed to pay RRPR Rs 350 crore, shows a loan agreement dated July 21, 2009; this was to be used in full to repay ICICI’s loan. RRPR’s balance sheets filed with the Registrar of Companies show that on March 31, 2009, it had a loan of Rs 349,26,14,485 from ICICI and an interest of Rs 17,21,80,697 on this loan.

Between March 31 and August 7, 2009 — when it repaid ICICI after receiving the money from VCPL—an additional interest would have accumulated. As per an investigation report made by DG (Investigation), Income Tax, New Delhi, ARA Centre, Jhandewalan, the ICICI had given NDTV the loan at 19 per cent interest.

So an additional Rs 29,94,63,689 would have to be added as interest since March 31, according to calculations submitted by Sanjay Dutt, director of Quantum Securities, who filed the FIR leading to the CBI raid. The total amount payable to ICICI by August 2009, as estimated by Dutt, would therefore have been Rs 396,42,58,871 crore.

RRPR and ICICI settled at Rs 350 crore, which came from VCPL, when RRPR owed Rs 396 crore to ICICI. The complainant calculated this as a loss of Rs 46 crore to ICICI. But, even as of March 31, 2016, the RRPR balance sheet shows an outstanding of Rs 4,40,53,877 to ICICI. So, the complainant has calculated, the money RRPR actually owed ICICI included this Rs 4.40 crore, so that the loss suffered by ICICI was actually Rs 42,02,04,994.

Against the Rs 4.40 crore shown as outstanding to ICICI on the RRPR balance sheet, complainant Dutt has calculated the interest at approximately Rs 6 crore for 2009-16. Added to Rs 42.02 crore, the total loss of interest by ICICI would be Rs 48 crore. That is the amount for which the CBI conducted the raid on the Roys’ premises Monday.

Even as RRPR repaid first India Bulls and then ICICI, it continues to owe VCPL Rs 403.85 crore. After the initial Rs 350 crore it received from VCPL, it got an additional Rs 53.85 crore. As per the loan agreement signed between the two companies, the lender has the right to convert the loan into 99.99 per cent equity of RRPR at any point, giving it complete control over RRPR — which is still owned by the Roys though. RRPR owns 29.2 per cent of NDTV’s shares. Effectively, VCPL has rights over 29.2 per cent of NDTV shares.

When it gave the loan to RRPR, VCPR was owned by subsidiaries of Reliance Industries, and the money too had been piped from Reliance Industries to RRPR through VCPL. But in 2011-12, the Reliance company that had given VCPL Rs 403.85 crore — Shinano Retail, a step-down subsidiary of Reliance that also owned half of VCPL’s equity — claimed in its annual report that it had been repaid the entire amount.

Part of this money had come from Eminent Networks, a company linked to Mahendra Nahata who is a board member of Reliance Jio. Eminent’s balance sheet for that year shows that it had given VCPL Rs 50 crore, and got rights over the Rs 403.85 crore worth of debentures of RRPR, which could be converted into 99.99 per cent of its equity. During the same financial year, VCPL’s ownership also moved hands to companies that are linked to Nahata.

Who had repaid Shinano the remaining Rs 353.85 crore is not immediately clear. Filings with the Registrar of Companies do not shed any light on who plugged this massive gap. As of March 31, 2016, VCPL is still owed Rs 403.85 crore by RRPR and can convert it into equity to control over 29 per cent of NDTV’s shares.

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  1. J
    JS
    Jun 7, 2017 at 10:41 pm
    All the bhakts here will only watch Times now. How dare any other news channels even exist.
    Reply
    1. C
      C S
      Jun 7, 2017 at 7:39 pm
      The financial dea s of NDTV, as brought out in this article, to say the least, are not transparent. But that is the case with most of the companies which are financed from Mauritius or some other tax havens through a web of investment companies. However, the CBI raid was based, apparently, on a complaint made by an individual that ICICI Bank had given some special favours to NDTV, in which the bank lost Rs 48 crores. One may point out that the stressed ets of all banks were reported to be about Rs 9 lakh crores and Rs one lakh forty thousand crores have been written off . In doing so the banks had shown special favours to several business houses, amounting to hundreds of thousands of crores. And one has not heard the banks or any outside parties having made a complaint to the CBI, or the latter having investigated them. It is the CBI taking action without a complaint from the person directly affected [in this case the ICICI bank]that makes it appear to be a case of vendetta.
      Reply
      1. R
        rishi
        Jun 7, 2017 at 4:50 pm
        Time to nab NDTV and their ilk who used extraneous resources for illegitimate gains .....no one is above the law.
        Reply
        1. V
          Vinayak Upadhyaya
          Jun 7, 2017 at 9:38 pm
          Media is controlled by business houses hence each media house is helping other for coverup . If media is corrupted then our one pillar of democracy will fall . How media will be free and fair after bad financial practices ? In democratic system public is totally dependent upon media and believe in media also but not a single newspaper has given name of defaulters because all of them are related to big business houses.
          Reply
          1. J
            JS
            Jun 7, 2017 at 10:36 pm
            And let Time now roam free as they help Bharatiya Jokers Party isnt it!
            Reply
          2. I
            Ivan
            Jun 7, 2017 at 2:57 pm
            So is it the contention of the authorities, and the brains in the CBI that banks should suffer no losses at all with their loans ? There is always a possibility of default. Anyone who taken loans for commercial purposes knows this. At 19 , when the FD rate was around 9 , the loan clearly had a speculative element. If Pranoy had made billions, ICICI would effectively have doubled their initial prin l over a mere 5 to 6 years. Not a bad deal at all. But it went sour so ICICI or those pushing ICICI behind the scenes now want take out an independent voice in the press. We will not forget this, ICICI.
            Reply
            1. I
              Ivan
              Jun 7, 2017 at 2:58 pm
              19 per cent .... 9 per cent...
              Reply
              1. H
                Harry
                Jun 7, 2017 at 4:42 pm
                Lender has right to take possession of ets of defaulter and put it for in market. did it do it, rather than lose money? If not why?
                Reply
              2. R
                RS
                Jun 7, 2017 at 11:07 am
                Reporters should ask Mr. Modi, Jaitley and the rest of BJP where the black is that they promised to bring back to India and follow up with, Why did Mr. Modi let Vijay Mallya escape from India with Rs/- 9000 CRORE REAL FRAUD? How much of that did he promise to pay BJP under the table for fighting the next elections?
                Reply
                1. H
                  HA Gokhale
                  Jun 7, 2017 at 9:35 am
                  Faujis like me, are unlikely to shed any tears for these travails of Pranoy Roy. He is brilliant and articulate and I used to live his earlier programs before he created NDTV. For various reasons this man and his team are not perceived as particularly patriotic and objective. Let justice be done without too much delay because they and others of their ilk like Tarun Tejpal and Karan Thapar are so deeply embedded in the system that they will tamper with it given half the chance.
                  Reply
                  1. R
                    RS
                    Jun 7, 2017 at 11:11 am
                    He is not perceived as particularly patriotic because he does not promote the HINDUTUWA agenda. For the Racists at home, that makes him unpatriotic is quite an amusing and laughable anecdote.
                    Reply
                    1. R
                      rishi
                      Jun 7, 2017 at 4:48 pm
                      there is no such thing called hindutva agenda......your compulsive and irrational defence of NDTV without knowing the facts is duly exposed in your comment !
                    2. H
                      Harry
                      Jun 7, 2017 at 4:44 pm
                      he is Bengali. The best place for him is in NOAKHALI. he should be send there to see his bravery.
                      Reply
                      1. J
                        JS
                        Jun 7, 2017 at 10:38 pm
                        He is not patriotic because he doesnt support Bharatiya Jokers Party isnt it!
                        Reply
                      2. R
                        Raghu Reddy
                        Jun 7, 2017 at 1:58 am
                        What happened to 353.85 crores is immeterial now for the dirty media people. It is an attack on media now. And their previleges are under attack. So what the media want to say is that the are above the law. And law should not come into their street even. Great dirty media lucchas.
                        Reply
                        1. K
                          kris
                          Jun 7, 2017 at 12:49 am
                          Please read the excellent book written by Rajiv Malhotra- "Breaking India". The book clearly explains the strategy of Western intervention to create chaos, and destabilize the Indian subcontinent. The west (US/UK etc)makes use of its agents Congress, Communists, Muslims and Christians and (Lallu, Mulayam, Karunanidhi etc..) to carry out its negative agenda. A large group of prominent media houses like The Hindu, Hindustan times, NDTV eetc..have sold themselves to foreign powers and are enablers to promote Christianity
                          Reply
                          1. Z
                            Zulfi Sayed
                            Jun 7, 2017 at 7:22 am
                            In a different word you mean Modi is the only saviour of India sometimes i wonder is he a Human or Avtaar of Bhagwaan Vishnu 😂
                            Reply
                            1. J
                              JS
                              Jun 7, 2017 at 10:40 pm
                              Bhakts like you will never grow. They will always lick Modi even if he taste bad as pig!
                              Reply
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