The CBI has registered a case of corruption and criminal conspiracy against NDTV and its promoter Prannoy Roy for allegedly funnelling “proceeds of corruption” of “public servants” through its various companies. The agency has also alleged that the FIPB approval for foreign direct investment (FDI) into an NDTV subsidiary was illegally granted in 2006-07.
In an FIR registered on August 19, the CBI alleged that between 2004 and 2010, NDTV floated 32 subsidiaries in tax havens and brought FDI to the tune of several hundred crores of rupees into its various channels. This was illicit money of certain public servants and was brought in through “sham transactions”, it alleged.
In a statement, NDTV said that this is an “attempt to silence free and fair reportage through malicious and fabricated charges”. “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,” it said.
In the FIR, the CBI alleged that NDTV Network plc (an NDTV subsidiary), London, got approval from the FIPB (Foreign Investment Promotion Board) in violation of laid down provisions for FDI worth $130-160 million.
Subsequently, NNPLC received FDI worth $163.43 million until September 2009, the agency alleged, adding that the firm invested the said amount in various subsidiaries of NDTV through a web of complex transactions.
NNPLC was incorporated in November 2006. Among the various transactions that the CBI has mentioned in its FIR are investments made by General Electric and Universal Studios in NDTV.
The CBI had earlier initiated a preliminary enquiry (PE) in the case based on a complaint which alleged that Prannoy Roy, his wife Radhika Roy, NDTV CEO Vikram Chandra and its director Narayan K V L Rao had received indirect investments from public servants into the company.
This PE has now been converted into an FIR in which NDTV Ltd and unknown public servants have been named as accused.
The findings of the PE, as mentioned in the FIR, said, “NDTV Ltd, through its promoters viz. Prannoy Roy and Radhika Roy, KVL Narayanan Rao (since expired), Vikramaditya Chandra had entered into criminal conspiracy with unknown public servants with the object of bringing tainted money of unknown public servants through a web of complex transactions through the FDI route. The aforesaid acts of omission and commission on the part of Prannoy Roy, Radhika Roy, Vikramaditya Chandra and K V L Narayanan Rao and unknown public servants and others prima facie disclose commission of cognizable offences under lndian criminal laws.”
According to the CBI, during the period May 2004 to May 2010, NDTV floated around 32 subsidiary firms all over the world, mostly in tax havens such as the Netherlands, UK, Dubai, Malaysia, Mauritius etc.
“Majority of these companies had no business transaction and they were meant only for financial transactions to bring funds from abroad. It is alleged that these transactions are sham transactions and aforementioned funds are invested by unknown public servants through NDTV and later laundered back to India through multiple layers of complex transactions and shell companies. Proceeds of corruption of unknown public servants were invested through NDTV,” said the CBI FIR.
The probe agency has also alleged that on November 30, 2006, NDTV incorporated NNPLC in London which received $20 million through the issue of 25,575 convertible preference shares together with 2,558 warrants from Fuse Media Holding LP in March 2007 for 4.5-5% stake.
NNPLC raised fresh funds of $100 million through Jefferies lnternational by issue of step-up coupon convertible bonds in May 2007. In this transaction, the CBI has alleged, Jefferies received $5.5 million as commission.
NNPLC later transferred Rs 193.98 crore to various subsidiary companies of NDTV Group which included NDTV Imagine, NDTV Life Style, NDTV Emerging Market BV, NDTV Convergence Ltd and NDTV Labs Limited, the CBI said.
According to the CBI, NDTV incorporated another company in the Netherlands on March 4 2008, “in the name and style of NDTV International Holding BV” for raising about $150 million from NBCU, a subsidiary of General Electric USA.
NBCU allegedly transferred the amount from the account of its subsidiary Universal Studios lnternational BV Netherlands on May 23, 2008, and acquired 26% indirect shareholding in NNPLC. The said amount was further transferred to subsidiaries of NDTV incorporated in Mauritius and London and finally received by subsidiaries in lndia, the FIR said.
The CBI also said that the $100 million raised by NNPLC through Jefferies was repaid to the respective investors by NDTV in ratio by paying $72.40 million in November 2008. “Similarly, the $150-million investment by NBCU. has been settled by buying back the shares of NDTV Network International Holding BV, Netherlands from NBCU after paying USD 12,472,750 to Universal Studio BV on 26.10.09,” said the FIR.
According to the NDTV statement, the CBI case was filed “as part of the continued persecution of free press”. “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,” it said. “NDTV and its founders have full faith in India’s judiciary at this crucial time…”