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Publication: PGurus.com
Date: June 10, 2017
URL:   https://www.pgurus.com/income-tax-actions-against-ndtv-started-during-pranabs-period-chidambaram-stopped-the-probe/

The Govt. has clarified in a Press Release that NDTV probe was started in 2011 when Pranab Mukherjee was the Finance Minister

Prannoy Roy’s utterances in the protest meet convened at Press Club in Delhi fall flat after Government officials explain the details of the investigation history on frauds and illegalities committed by NDTV. The details of the case history show that Income Tax Department (ITD) had started a probe against NDTV from 2011, when Pranab Mukherjee was the Finance Minister and the actions of the IRD went into a deep freezer when P Chidambaram landed back in Finance Ministry in June 2012.

…the 14 shell companies (except one at Mauritius) were intentionally dissolved after laundering the funds so that it becomes difficult for the Tax and Enforcement authorities in India to lay hands on them.

Pranab Mukherjee ordered a probe after the findings of Income Tax officers including the whistle-blower IT Commissioner SK Srivastava in 2011. The frauds of NDTV heated up after the expose on ICICI Bank frauds in Sunday Guardian in December 2010.

“The search by Central Bureau of Investigation at the premises of Prannoy Roy, Radhika Roy and Office of M/s RRPR Holdings Pvt. Ltd. on 05.06.2017 is an off-shoot of continuing investigation by the Income Tax Department and Enforcement Directorate since the year 2011 onwards. Income Tax Department is looking into undisclosed income of nearly Rs. 1600 crores by Dr. Prannoy Roy, Mrs. Radhika Roy and companies controlled/associated with NDTV Group. Enquiries in this connection were initiated by the Department during UPA regime since year 2011,” said an information note provided by senior officials.

NDTV, which is controlled by Prannoy Roy and Radhika Roy had only two subsidiaries in India till the year 2006. However, from 2006 to 2012, NDTV floated 32 paper companies including 14 foreign shell companies in U.K., the Netherlands, Mauritius, Sweden and U.A.E. in order to launder unaccounted income of Rs. 1100 crores using these paper entities. These companies were having no real business, no employees and no business premises. Notably, the 14 shell companies (except one at Mauritius) were intentionally dissolved after laundering the funds so that it becomes difficult for the Tax and Enforcement authorities in India to lay hands on them. These paper companies have claimed to raise funds through unidentified entities situated in British Virgin Islands, Cayman Islands, U.K., U.S.A., Switzerland, Netherlands etc. during the financial years 2007-2009. These claims were found to be false during investigation by Income Tax Department.

Assessment of the concealed income of Rs. 642.5 crores relating to NDTV Group/related companies was done during UPA regime on 21.02.2014. Re-assessment proceedings for concealment of Income of Rs. 403.85 crores have been initiated against M/s RRPR Holdings Pvt. Ltd. (owned by Prannoy Roy and Radhika Roy) and are presently underway. Assessment proceedings of unexplained funds of Rs. 400 crores in which funds were received from unknown entities in British Virgin Islands and Cayman Islands is in progress. Concealed income of Rs. 94 crores – Rs. 47 crores each by Mrs. Radhika Roy and Dr. Prannoy Roy – arising from manipulation of sale and purchase prices of shares, has been assessed and confirmed in the First Appeal also.

CBI registered a case against Prannoy Roy, Radhika Roy, M/s RRPR Holdings Private Limited and others on 02.06.2017 on the complaint of a share holder of NDTV and ICICI Bank. The complaint alleges that the promoters of M/s NDTV – Prannoy Roy, Radhika Roy and promoters of M/s RRPR acting in criminal conspiracy with unknown officials of ICICI Bank got a loan of Rs. 375 crores in the name of a private holding company having paltry assets of Rs. 75 crores and thereby violated Sec. 19(2) of the Banking Regulation Act, 1949 and the Master Circular dated 28.8.1988 of Reserve Bank of India. In furtherance of the conspiracy, ICICI Bank took the entire share holding of the promoters of NDTV (nearly 61%) as collateral and then accepted pre-payment of the loan of Rs. 375 crores within 10 months (even though the loan period was 3 years) by reducing the interest rate from 19% per annum to 9% per annum.

As a consequence thereof, wrongful loss of Rs.48 crores was caused to ICICI Bank with a corresponding wrongful gain to the promoters of NDTV. The promoters of NDTV repaid the loan of ICICI Bank by taking another loan from M/s Vishwapradhan Commercial Pvt. Ltd. (VCPL). This information was concealed from SEBI which has initiated proceedings in this regard.

The Reserve Bank of India detected violation of several provisions of FEMA by the NDTV Group to the tune of Rs. 2030 crores. The Enforcement Directorate has issued Show Cause Notice for contravention of FEMA provisions and adjudication proceedings are in progress.