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Here is why Prannoy Roy and Radhika Roy were stopped at the airport and were not allowed to leave the country

While NDTV cries hoarse about 'freedom of the press' being curbed, the allegations of financial impropriety against Prannoy Roy and Radhika Roy, the promoters of NDTV are extremely grave.

NDTV founders Prannoy Roy and his wife, Radhika Roy, were prevented from leaving the country recently, the channel claims. In a statement published on its website, the channel has called it a ‘subversion of media freedom’. NDTV in a statement said that they had been stopped on the basis of a “fake and totally unsubstantiated corruption case” filed by the Central Bureau of Investigation about an ICICI Bank loan that their company, RRPR Holdings, had taken.

The brief statement reads, “They have been stopped from travelling abroad on the basis of a fake and wholly unsubstantiated corruption case initiated by the CBI that was filed two years ago and in which Radhika and Prannoy Roy have been fully cooperating. Today’s action is, along with events like raids on media owners, a warning to the media to fall in line – or else.”

While NDTV cries hoarse about ‘freedom of the press’ being curbed, the allegations of financial impropriety against Prannoy Roy and Radhika Roy, the promoters of NDTV are extremely grave. More importantly, judicial bodies and statutory investigation agencies have found them in violation of major laws and in some cases held them guilty of fraud, manipulation and use of “deceptive financial instruments” to hide real ownership of NDTV.

However, the troubles of Radhika Roy and Prannoy Roy started way before the ICICI Bank Loan fracas came into the open.

Before the NDTV-ICICI loan fraud case: How it all began

While the monetary troubles of NDTV began in 2004, their first shenanigan was their deal with General Atlantic Partners Investment (GA). That deal allegedly violated PIT (Prohibition of Insider Trading Regulations) and SAST (Substantial Acquisition of Shares & Takeover Regulations) of the Securities and Exchange Board of India (SEBI). The details of that deal have been covered in detail by PGurus and can be read here.

In 2007 Radhika and Prannoy Roy bought back 7.73% stake held by GA. NDTV’s stock was hovering at around Rs 400 at the time, but the Roys bought shares back at Rs 439. This inspired an “open offer” that allowed the other investors to sell their stake at the same price that the Roys bought back their shares in – Rs. 439.

Allegedly, while the “open offer” was being played out, Prannoy Roy and Radhika Roy violated Market rules and entered into another contract with Goldman Sachs to sell to them 14.99% of the stake they held in NDTV. This contract gave Goldman Sachs the right to nominate one of their own on the Board of NDTV.

Interestingly, this deal was not disclosed either by NDTV, the Roys or Goldman Sachs to the shareholders or the authorities and most crucial and legally binding of them being Ministry of Information and Broadcasting, i.e. the Ministry that licences a News Broadcaster its license of setting up and running a new channel. Eventually, Goldman Sachs owned 14.6% of the shares of NDTV and they were falsely shown as an Open Market Sale, while in reality, they were pre-meditated/intentional trades between Goldman Sachs and the Roys.

Oddly, one director that Goldman Sachs nominated said in a letter—responding to a letter from a shareholder (Quantum Securities Limited) —that he was a “nominee of certain funds managed by Goldman Sachs which were invested in the Company.”

Letter by Director of NDTV (Goldman Sachs nominee) to Sanjay Dutt (minority shareholder of NDTV)

From the letter that was presented to the High Court in 2013, it is clear that Goldman Sachs was not the direct beneficiary of the stake. Intriguingly, it still remains unclear where the money came from and who Goldman Sachs was fronting for in this deal. What is more surprising is that Ministry of Information and Broadcasting has ignored this ownership violation by the Roys and that to the sale being to a “benami” holder i.e. Goldman Sachs.

In 2016, SEBI had initiated proceedings against 2 Goldman Sachs entities that were involved in this deal.

In 2016, it was reported:

“In the first tranche in April, GSIM bought 5.1 million shares. Of this, 4.9 million shares came from NDTV promoters Radhika Roy and Prannoy Roy. In the second tranche, GS Mace along with GSIM as a person acting in concert (PAC) bought 4.03 million shares, the bulk of which came from RRPR Holding, another promoter group shareholder controlled by the Roys. At the Rs 400 levels the stock was trading at that time, the deals would have been worth around Rs 360 crore.

In an affidavit filed before the Delhi High court dated August 22, the regulator said: “adjudication proceedings were initiated against GS Mace Holdings Ltd with Goldman Sachs Investments (Mauritius) Ltd as PAC for alleged violation of Regulation 7(1) of SAST (Substantial Acquisition of Shares and Takeovers) Regulations, 1997…” The affidavit was filed in compliance of an April order by the court to give a status report in the case between NDTV and Quantum Securities, a minority shareholder.

The deals were disclosed as open market transactions in a filing to the BSE. However, Sebi has received complaints that these were part of a negotiated agreement between the promoters and Goldman Sachs and the relevant details were not disclosed to the exchanges.

After this deal, Prannoy and Radhika Roy planned to buy back the shares but evidently, fell short of the funds. To meet the shortfall, they borrowed Rs. 501 crores from India Bulls. Later, to repay that loan, they further borrowed Rs. 375 crores from ICICI.

It is this transaction and the loan from ICICI which is the prime focus of this article. It needs to be understood that the NDTV scam has several layers and legs. However, since the Roys themselves have attributed the Central Government not allowing them to leave India to the ICICI case, it bodes well to delve into the details of that transaction threadbare.

To understand what the case against Prannoy and Radhika Roy is as far as the ICICI Bank Loan is concerned, one must study the FIR filed against the duo in June 2017.

The FIR against Prannoy and Radhika Roy of NDTV in the ICICI loan fraud case (June 2017)

The FIR was filed against Prannoy Roy, Radhika Roy, NDTV, RRPR Holdings Pvt Ltd and unknown officials of ICICI Bank by a company called Quantum Securities Limited. The charges levelled were those of criminal conduct, conspiracy and cheating. Sanjay Dut’s company, Quantum Securities Limited (QSL) through its Director Sanjay Dut. QSL is a shareholder both in NDTV and ICICI and filed the FIR as an aggrieved party of the alleged misdeeds.

The crux of the issue in the ICICI case is that allegedly, Prannoy Roy and Radhika Roy caused ICICI a loss of Rs. 48 crores, took unlawful favours and had profit transferred to them. ICICI allegedly also involved in the promoters of NDTV to transfer the ownership of their news broadcasting company to a shell company. The charges in the FIR also include the laundering of Rs. 403.85 crores in order to create interest in favour of a benami party to gain illegal control of NDTV.

Essentially, the allegation levelled by QSL is that ICICI acted as a conduit of a benami person to launder funds amounting to Rs. 403.85 crores through a host of shell companies in order to create Benami interest in NDTV with the motive of avoiding detection of the true owner of the funds and the source of funds.

During August 2009, the Roys sold their shares in NDTV to RRPR Holding at Rs. 4 per share against its market price of Rs. 140 at that time. Then on 9th March 2010, the Roys bought 34.79 lakh shares of NDTV from RRPR Holding at Rs. 4 per share against the market price of Rs. 140 per share.

To fund the purchase of shares that the minority shareholders wanted to sell, the Roys created a company called RRPR Holdings Private Limited. RRPR borrowed Rs 501 crore from India Bulls Ltd.

To repay part of the India Bulls loan, RRPR borrowed Rs 375 crore from ICICI Bank in October 2008. In August 2009, RRPR found another lender called Vishvapradhan Commercial Private Limited (VCPL) to repay the ICICI loan. VCPL agreed to pay Rs 350 crore to RRPR in July 2009.

The FIR alleges that the loan of Rs. 375 crores (which was drawn down to Rs. 350 crores) was secured against collateral of the entire shareholding of the promoters (Radhika and Prannoy Roy) of NDTV and neither the bank nor the promoters of NDTV made disclosures of creating of such collateral in favour of the Bank. The disclosure is mandatory according to SEBI and MIB rules.

Part of FIR

The FIR also states that according to Banking regulations, no bank can hold as collateral more than 30% shares of a company, however, ICICI held over 61% of the voting capital as collateral and hence, ICICI was actively participating in violating MIB regulations, SEBI regulations and MHA security clearance guidelines for News Media Companies.

QSL provides further proof of ICICI being hands-in-gloves with NDTV in perpetuating this entire fraud. The FIR says that during the succeeding financial year (2009-2010), NDTV entered into a settlement agreement with the bank on 9th August 2009 and repaid 99% of the loan they had drawn. As RRPR Holdings repaid Rs. 350 crores, in their balance sheet, it was reflected that Rs. 4 crores of repayment to ICICI is still outstanding. However, even though RRPR Balance Sheet showed that ICICI was owed Rs. 4 crores, on 7th August 2009, ICICI issued a letter confirming that the entire amount due to ICICI from RRPR has been ‘paid in full’.

Source of funds used to pay off ICICI as mentioned in the FIR

The FIR details the source of funds and how these funds were routed through shell companies by RRPR holdings (Being promoter of NDTV) in order to repay the ICICI loan.

  1. In 2009-2010, Reliance Ventures Limited extended a ‘zero coupon optionally convertible loan’ of Rs. 403.85 crores to a company called Shinano Retail Private Limited (SRPL).
  2. During the same year, SRPL extended the exact amount down to the last rupee in the same ‘zero-coupon optional convertible loan’ to its associate company Vishvapradhan Commercial Private Limited (VCPL).
  3. In the same year, VCPL transferred the entire, exact amount to RRPR Holdings in two tranches. Rs. 350 crores and then, Rs. 53.85 crores. This, even the IT Department and SEBI has held that it was cloaked as a loan but was actually the transfer of control to VCPL by Radhika Roy, Prannoy Roy and RRPR Holdings.

Further, the FIR goes on to say that the shell companies involved in this layered transaction had a nominal capital of only Rs 1 lakh with no tangible business. It also says that this is a covert and pre-meditated operation so that an exact amount can be routed to the end beneficiary – RRPR Holdings, to gain control of the listed company NDTV as RRPR holding along with Radhika Roy and Prannoy Roy hold over 61% of fully diluted equity shares of NDTV. This transaction basically transferred the complete control of NDTV to VCPL (The benami front).

Part of FIR

Role of ICICI and loss to the Bank

The FIR alleges that ICICI was in knowledge of the sham agreement between RRPR Holdings and VCPL and thus, violated several laws. While the agreement was going through, ICICI could have asked for the complete portfolio thereby realising that it was a sham agreement, but it didn’t.

The role of ICICI doesn’t end there. There clearly seems to be some form of financial jugglery as far as the loan that was due to ICICI.

In the NDTV Balance Sheet, year after year has shown an outstanding loan amount due to ICICI.

Balance Sheet of RRPR Holdings

In the footnote of NDTV’s balance sheet which was signed by its auditors, it clearly says that the outstanding ‘potential’ liability of RRPR Holdings towards ICICI Bank is Rs. 10,59,46,123. The total liability due to ICICI was Rs. 15 crores – Rs 10.59 crores appeared in the footnote and Rs 4.40 crores appeared in the Balance Sheet itself.

However, it was at the same time that ICICI issued a letter to RRPR Holdings saying that their liability had been paid in full.

Letter issued by ICICI Bank

The question thus arises that if RRPR itself had admitted in their Balance Sheet year after year that their outstanding liability to ICICI Bank was to the tune of Rs. 15 crores, how did ICICI issue a letter that confirmed no amount was due or payable to the bank? Further, RRPR has the outstanding amounts clearly shown in the Balance Sheet and also in the notes to accounts audited by their auditor and signed by Roys.

Further, the Balance Sheet of RRPR Holdings says that the amount shall be repayable to ICICI after market capitalisation of NDTV reaches a ‘certain milestone’ according to the settlement agreement dated 6th August 2009. Such a contingency agreement, according to the FIR is not permissible under the Banking Regulation Act, and thus, ICICI was knowingly involved in financial chicanery.

The trouble doesn’t end there. Other than being in violation of SEBI and Banking regulations, ICICI also seems to be in violation of FEMA and PMLA rules. According to the FIR, since ICICI was in knowledge of the agreement between RRPR Holdings and VCPL and failed to do its due diligence, specifically, because the agreement between the two involved a cross border transaction to the tunes of USD 85 million and ICICI was aware of that.

Agreement between RRPR and VCPL

Further, the FIR states that the actual, total loss to ICICI is to the tune of Rs. 48.02 crores.

Part of FIR

ICICI loss and Prannoy Roy’s personal gain

The FIR makes another grave charge against not just ICICI but also Prannoy Roy personally. It says that on 8th March 2010, the same Financial Year as the dubious settlement between ICICI and RRPR Holdings, Prannoy Roy and Radhika Roy had the means and funds to pay off ICICI but chose not to.

In fact, the FIR makes further grave charges. The FIR says that at the same time, VCPL further paid Rs. 53.85 crores to RRPR Holdings which was then directly siphoned off/paid to Prannoy Roy personally from the RRPR Holdings Bank account on the very same day that VCPL transferred that money to RRPR Holdings.

Part of FIR

The FIR further states that ICICI bank overlooked this additional payment and did not recover the amount outstanding to the bank even though the promoters gained at the loss of the bank by siphoning off money into their personal account via RRPR books. It also says that the Rs. 4.40 crores that remain outstanding has not been recovered and the bank has not made any effort in that direction.

QSL puts the estimate of loss accrued to ICICI bank at Rs. 48 crores.

Question on ICICI and NDTV that must be answered

Thus, from the FIR itself, the following questions arise:

  1. What were the motives of ICICI and the promoters of NDTV in concealing the fact that the loan of Rs 375 crores extended to RRPR Holding was after the creation of collateral of the entire shareholding of NDTV?
  2. Why did the Bank not recover the full amount of the liability and instead, issue a letter that said RRPR had no dues outstanding to the Bank even though RRPR’s Balance Sheet clearly mentioned outstanding liability.
  3. Why did ICICI waive off its interest income?
  4. Why did ICICI choose to participate in an agreement that seems illegal and breaks several SEBI, IT, FEMA and PMLA rules?
  5. Who were the key officers of ICICI Bank at the top-level involved in this deal and were they in contact with some industrialists or politicians to facilitate this deal?
  6. What is the role played by the then Chairman and MD, Mr. K V Kamath, why hasn’t his role been questioned?

What the FIR demands

The FIR makes the following prayers.

Part of FIR

It says:

  1. CBI to investigate ICICI Bank.
  2. Investigate who the true owner of NDTV is.
  3. Investigate what role did ICICI play in facilitating this clandestine change of control.
  4. The Modus Operandi of this entire operation.
  5. Investigate why were USD 85 Million of NDTV funds lying overseas and were thereafter illegally brought to India as leverage to make promoters gain Rs. 403.85 crores.

The Income Tax Appellate Tribunal Order in 2019 for Assessment year 2009-2010, 2010-2011

The Delhi bench of Income Tax Appellate Tribunal (ITAT) had upheld the addition of long term capital gains (LTCG) tax against Prannoy Roy and Radhika, both promoters of NDTV for realising share sale consideration in the guise of loan. The case was related to purchase and sale of shares of NDTV in August 2009 by RRPR Holding Pvt Ltd and the Roys and concealment of income of over Rs. 117 crores each during two assessment years.

One of the most pertinent observations of ITAT was the following:

ITAT Judgement

The Roys presented the argument that this transaction was held between closely related parties and hence, there is no motive of tax evasion. The ITAT summarily rejected the argument saying that at that point itself, the Roys have failed to explain by credible evidence the reasons for buying the shares of NDTV at Rs. 4 per share when the quoted price of the share was Rs. 140 per share. Thus, the Roys cannot say that there was no motive for tax evasion.

This pertains to facts mentioned in the FIR itself. During August 2009, the Roys sold their shares in NDTV to RRPR Holding at Rs. 4 per share against its market price of Rs. 140 at that time. Then on 9 March 2010, the Roys bought 34.79 lakh shares of NDTC from RRPR Holding at Rs. 4 per share against the market price of Rs. 140 per share.

The Assessing Officer had held that this transaction was done to hide the LTCG and that the transaction shown as long-term capital gain is nothing but Sham transactions which have been manipulated to avoid the tax arising on the transfer of shares of NDTV Limited.

ITAT Judgement

Further, the Assessing Officer held that the assessee is a Director of NDTV and holding ‘substantial stake and is in a position that can influence the decision of that company’. Therefore, the actual nature of the transaction has to be examined by “lifting the corporate veil” which could reveal that NDTV and the Roys are not really distinct identities as far as this transactions are concerned and both acted in connivance.

Interestingly, the ITAT bench also observed that RRPR Holdings could be a shell company considering it had no assets other than the shares of NDTV.

ITAT Judgement

The AO observed that “It is apparent that if the shares are transferred at Rs. 4 per share, the assessee will pay capital gain tax only considering the sale value of those shares at Rs. 4 per share whereas the RRPR Holdings will obtain loan on those shares at the listed price of share shares of NDTV Limited, free of interest. In a way, it was a methodology devised to pledge the shares of promoters to obtain interest-free loan for an indefinite tenure coupled with call option agreements to transfer the shares to NDTV Limited. This shows a clear-cut benefit resulting in the hands of the assessee and Dr Prannoy Roy”. 

The contents of the FIR was further verified when ITAT observed, “it is apparent that RRPR Holdings private limited is merely a company to borrow loan, which was not to be repaid but to be used by the promoters till the loans get converted into the transfer of the shares of NDTV limited by RRPR Holdings Ltd in favour of lender”.

SEBI Order that confirmed fraudulent conduct on the part of Prannoy and Radhika Roy of NDTV in ICICI loan case

On 26 June 2018, SEBI ordered Vishvapradhan Commercial Pvt Ltd (VCPL) to make a public offer for acquiring shares of NDTV. In 2009, VCPL had assumed controlling stake in NDTV by giving a loan of Rs 350 crore to its promoters Radhika Roy and Prannoy Roy Holdings Pvt Limited (RRPR), effectively acquiring 52% of NDTV.

SEBI stated that this was done in violation of their takeover norms. SEBI noted that the takeover exercise “has been conveniently couched as a loan agreement.” It further directed VCPL to pay 10% interest on top of a takeover fee to the former shareholders of the company.

The SEBI order states, “It is evident from the conduct of VCPL, and of RRPR, Dr Prannoy Roy and Mrs Radhika Roy, that the intention of providing loan to RRPR was not to acquire “control” over RRPR or NDTV and the Loan Agreement is a normal lending transaction to enable RRPR to repay its then existing debt”.

The SEBI order further says the VCPL had in a 2016 letter stated that the “source for the loan was the borrowing from Reliance Strategic Investment Limited, a wholly-owned subsidiary of Reliance Industries Limited” and VCPL had also submitted the Article of Association and Memorandum of Association of all three companies that entered into a contract with RRPR. VCPL had claimed that all three companies were associated with each other.

SEBI noted, however, that the three companies had no history of any lending activity and that the “financial statements in the annual reports paint a very odd picture” of VCPL and the two associated companies that entered into a contract with NDTV and its promoters.

SEBI also says that while VCPL’s revenue for the year ending March 2017 shows only Rs. 60,000, its asset side in the Balance Sheet has more than 400 crores in long term loans and advances.

SEBI Order

It further says, “These reports as provided by the noticee question the motive of the noticee in entering into the transaction with the promoters of NDTV Ltd. A company or financial institution in the general practice of lending may be expected to have such exceptional clauses in loan agreements. Instead, in the current set of facts and circumstances, it is clear that the noticee and it’s associate companies had neither the history of advancing such loans nor do they appear to have had the financial wherewithal to advance loans on such liberal terms. Further, assuming the shares of NDTV did form the collateral for the loan, despite the loan being substantially under-collateralised, the lender/noticee has not sought any repayment despite market value having almost continuously eroded till date. A prudent person would not expect that a financial lender would be so unperturbed as to not seek repayment of its protected principal amount till date”. 

SEBI Order

The SEBI also maintained the illegitimacy of the transaction by concluding that the transaction was only to gain control of NDTV by VCPL right from the day of the execution of the agreement.

The Securities Appellate Tribunal (SAT)

MoneyLife had reported the following:

“SAT had observed that RRPR Holding took a loan of Rs. 350 crore from ICICI Bank Ltd, at an interest rate of 19% per annum. This loan was required to be repaid within a specific period. Finding it difficult to repay the interest and principal amount RRPR Holding took two loans from Vishva Pradhan Commercial Pvt Ltd (VCPL) totalling about Rs. 400 crore in July 2009 and January 2010.

From their individual Demat accounts, Prannoy Roy and wife Radhika Roy transferred a total of 6,25,000 shares of NDTV to their joint Demat account. On 19 June 2008, their shares were sold from the Roys’ joint Demat account. The Roys claimed that the shares sold were long-term capital gains (LTCG) asset and its cost of acquisition was only Rs. 4,092. The income thus earned was shown as LTCG that was challenged by the Income Tax department.

The assessing officer (AO) held that shares transferred by Prannoy Roy and Radhika Roy from the joint Demat account are a short-term capital asset as they were acquired only on 28 December 2007 and sold on 19 June 2008 on first in-first out (FIFO) basis applicable to the dematerialised securities. The AO also considered the cost incurred by the Roys for crediting the shares into the joint Demat account on 28 December 2007, accordingly the computation resulted in short-term capital gain (STCG) of Rs1.30 crore each for the Roys as against the claim of LTCG”. 

It is to be mentioned here that Prannoy Roy had as usual brazened it out and said that the ITAT order was ‘legal and technical’ in nature and had to do with the classification of Short Term Capital Gains and Long Term Capital Gains. He had also said that this ITAT order would be challenged by him. However, MoneyLife does quote him on him being named directly as a recipient of the ill-gotten benefit of the transactions.

The SAT noted some elements of the SEBI order and made observations regarding the agreement between RRPR Holdings and VCPL too. It was agreed that VCPL will give interest-free loan for a period of 10 years on the condition that the principal amount would be paid within 10 years and that the VCPL will have a right of first refusal on 50% of the shares in the event the said shares are sold in the market. In fact, the agreement basically gave the ownership of NDTV to VCPL and as we have already seen, VCPL was a shell company.

Interestingly, VCPL was also given the option of transferring 30% of the shareholding of RRPR Holdings to itself at the price of Rs. 214.65 per share. It was stated that at the time the loan agreement was executed, the price of the NDTV share was Rs. 130 per share. SAT had observed that the price of Rs. 214.65 per share was specifically decided to cover the loan amount of Rs. 403.85 crores. SAT had also noted the SEBI findings discussed above that had found the agreement to be a sham.

Other Shenanigans of the Roys and NDTV

In 2015, the Securities and Exchange Board of India (SEBI) had imposed a fine of ₹2 crore on New Delhi Television for late disclosure of the fact that the company had received a tax demand of ₹450 crore from the income tax department. I-T department had raised the demand after assessing the income of NDTV for the assessment at ₹833.33 for the assessment year 2009-10, against the loss of ₹64.83 declared by the company in its return.

NDTV had received the tax demand in February 2014, but it didn’t inform the stock exchange about the same, thereby violating listing norms of exchange. The Exchanges came to know about the fact three months later, only after the company disclosed it in its annual report. Therefore, SEBI had imposed a fine of ₹2 crore on the company in 2015, as listed companies are required to disclose any “material event” immediately. Of this, ₹25 lakh was imposed for failing to furnish information on time, and ₹1.75 crore fine was imposed for failing to comply with listing conditions.

In 2018, SEBI had imposed an additional penalty of ₹10 on NDTV, ₹3 lakhs each of the 3 directors, and ₹3 lakh on the compliance officer Anoop Singh Juneja. Juneja was fined ₹2 lakh for violation of listing norms, and ₹1 lakh for violation disclosure practices. This additional fine on NDTV was imposed under the prevention of insider trading guidelines, while the directors were fined for violating the listing agreement. The three directors fined by SEBI are Prannoy Roy, Radhika Roy and Vikramaditya Chandra. NDTV had filed an appeal with the SAT against the SEBI order in 2018.

The SAT order in August 2019 found that NDTV indeed violated clause 36 of the listing agreement by not disclosing the tax demand immediately. The Tribunal ruled that ‘material events’ have to be reported immediately as they have ‘material impact’. Justifying the penalty of ₹25 lakhs for non-disclosure, the SAT said that the AO could have even imposed a penalty of ₹1 crore, as it is a serious violation. The order also said that the ₹1.75 crore penalty for violating listing norms is justified. The SAT order states, “In our opinion, considering the material event which was not disclosed we are of the opinion, that the penalty imposed is just and proper in the circumstances of the case”.

SAT also upheld the additional penalty imposed on NDTV and the personal penalty imposed on three directors in 2018. The order states that the Directors cannot escape their liability of the penalty imposed, because the decision to not disclose the tax demand was a conscious decision taken by the company.

But the SAT said that imposition of the penalty of ₹2 lakh on compliance officer Anoop Singh Juneja was unjustified. The order states that the officer works under the direction of the board of directors, and the officer is not responsible for complying with the listing agreement. But the officer is liable for Corporate Disclosure Practices, and therefore the penalty of ₹1 lakh was upheld.

The Niira Radia angle in the NDTV-ICICI case

One must recall, as discussed earlier in the article, that in 2009, Reliance Ventures Limited extended a ‘zero coupon optionally convertible loan’ of Rs. 403.85 crores to a company called Shinano Retail Private Limited (SRPL), and then, SRPL had transferred the exact same amount to VCPL, the shell company that virtually came to own NDTV later.

One recalls a conversation between Niira Radia and the now The Wire journalist MK Venu about NDTV. Niira Radia had told MK Venu that she and Manoj Modi, a close associate of Mukesh Ambani, were visiting Delhi to meet Prannoy. “We need to support Prannoy, you know,” she said. “We feel it needs to be supported.”

Reportedly, Reliance had denied any investment in NDTV when NewsLaundry got in touch with them. However, the evidence has clearly pointed to another direction.

Clampdown on Press Freedom?

The Roys have maintained that the Modi led government has been muzzling freedom of the press, with its investigation into NDTV, because the channel is predisposed to covering stories which go against the Modi government. Essentially, Prannoy Roy and Radhika Roy are saying that the CBI, SEBI, SAT and the High Court have been controlled and influenced by the Modi government. All agencies have essentially said that NDTV and the Roys specifically are in the wrong. The allegations have spanned from fraud to forming shell companies and even tax evasion. The case dates back to 2007 and is not a phenomenon that has happened recently. In fact, the High Court order that attests to the Roys raising Rs. 1100 crores by dubious means is yet to be covered and is outside of the purview of this article.

Through all of this, NDTV as a news channel has not been barred from airing or covering the stories that they choose to cover. The case itself is against Prannoy Roy and Radhika Roy primarily, with the company being a separate entity altogether and is spearheaded by a shareholder of the company, Sanjay Dut.

The Roys and their allied lackeys thus screaming “Freedom of the Press” when the Roy’s have been caught with their hands in the cookie jar seems like a mere diversionary tactic.

The layers of the NDTV scam are aplenty and range between several chapters. The ICICI loan and VCPL is merely one aspect of it, albeit, a complicated one. In subsequent articles, we will delve deeper into the specifics of several aspects of their alleged shenanigans, and through it all, NDTV will continue to air news. One certainly does wonder how the Modi government has clamped down on the freedom of the press, then?

In fact, Roys have tried to aggressively silence any voice that spoke of their alleged financial misadventures. Sanjay Dutt, Quantum Securities P Ltd. and its Directors have been sued for defamation by NDTV in the Bombay HC. Interestingly, Roy’s case is against Prannoy Roy and Radhika Roy primarily, who are also shareholders of NDTV. Now, one has to ask why NDTV, which is essentially Quantum Securities P Ltd’s own company (since Quantum is a minority shareholder) would sue them when he is trying to protect the company (NDTV) from the financial shenanigans of its promoters?

Earlier, the case of the ICICI loan was brought up Sunday Guardian (M J Akbar) and NDTV sued them for defamation. However, the Delhi HC dismissed the case in Sunday Guardian/M J Akbar’s favour and passed a Judgement after many years of litigation.

In essence, the entire case here is of financial chicanery, and the facts of the case have been attested to by various competent authorities, all, holding the Roys in the wrong side of the law at various levels. Prannoy Roy calling this a clampdown on Press Freedom is essentially, them trying to activate and entire establishment that goes to unimaginable lengths to protect their own.

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