NDTV Frauds Read online

  Every rule was bent for NDTV when they started their own two channels in English and Hindi. The investors were pouring in as MIB and Finance Ministry shut their eyes on imposing the strict rules of foreign money investment in news channels in India. NDTV even acquired a Helicopter2 to go for coverage, despite objections from Civil Aviation Ministry. Several State Chief Ministers from all parties were pleased to help NDTV in setting up plush offices as news bureaus. The sons, daughters, nephews and nieces of powerful people in state administrations landed as journalists in NDTV. All rules were flouted during the Vajpayee regime for NDTV, though it was mercilessly attacking with wrong, malicious reports against party’s Gujarat Chief Minister Narendra Modi.

  After the Sonia Gandhi led UPA came to power with the support of Left parties in 2004, NDTV’s golden days started. NDTV became a go between with Congress leadership and its other partners. Money started pumping into NDTV from all tax havens in the World, violating all norms of Finance Ministry during P Chidambaram’s tenure. Padma Shri awards were granted to Barkha Dutt and Rajdeep Sardesai for their “meritorious service”. NDTV can be thought of as one of the originators of paid journalism, especially during the 10 year long Congress regime and was at last exposed in the Niira Radia tapes.

  Several illegalities of tax evasion were done by NDTV during the Congress regime. UPA’s Finance Ministers P Chidambaram and Pranab Mukherjee were competing to dole out gifts to NDTV. When Pranab Mukherjee became the President of India, he went to the extent of allowing NDTV to conduct its 25th anniversary in Rashtrapati Bhavan! This was the first instance in Independent India, when the Rashtrapati Bhavan was thrown open for a private function, which was blessed by Who’s Who in Government, Politics, Intelligentsia and Business tycoons in 2013.

  Income Tax (IT) Commissioner S K Srivastava’s attempts to act against NDTV were curtailed by the then Finance Minister Chidambaram. The officer was hounded by the system which made him collapse physically and mentally for a while. The illegalities of tax violations and money siphoning by NDTV and its major shareholder Prannoy Roy will be discussed in detail with evidence in the coming chapters.

  NDTV was getting one investor after the other during the UPA regime. Mukesh Ambani and Naveen Jindal’s father in law’s Oswal Group were funding NDTV. Niira Radia tapes tell us that she brought Mukesh Ambani to NDTV. One must remember that these were the days of 2G, Coal, Krishna Godavari (KG) Basin scams[8] under the leadership of Sonia Gandhi led Government. NDTV was accepting money from all the culprits in the scams. Now it is found that NDTV even had a money trail of $50 million from Malaysia’s Maxis Group which was illegally allowed to take over Aircel mobile phone operator by Chidambaram in 2006.

  During the UPA regime of 10 years, the only major news breaks aired by NDTV were the hit jobs against Narendra Modi. The Congress regime would plant all hit jobs against Modi either in NDTV or in Tarun Tejpal’s Tehelka. And what happened to such so called news breaks against Modi? Be it Sohrabuddin Sheikh or terrorist Ishrat Jehan encounter or the Best Bakery case or any other Gujarat riot cases, nothing illegal was ever found. Teesta Setalvad and police offer Sanjeev Bhatt’s depositions etc were published by NDTV with much fanfare and parroted by Congress and Left liberals but in the end both fizzled out.

  Of course, it is relevant to mention some instances of proximity of key NDTV personnel to the UPA dispensation – Sonia Singh is the wife of R P N Singh (who was the then Home Minister of State) and another lady – Nidhi Razdan has been talked about as being close to Omar Abdullah (the then ally of Congress and Chief Minister of Jammu and Kashmir). Besides many other top personnel such as NDTV Group CEO - K V L Narayan Rao (son of the former Chief of Army Staff – Gen K V Krishna Rao) etc., was in the IRS (Income Tax Dept). Now the latest, Sarah Jacob (who hosts the famous We the People talk show post Barkha’s exit from NDTV) is the daughter in law of Montek Singh Ahluwalia. One can clearly accept and fathom how the “privileged access party continued” for so many years.

  But media is not the World. Now Modi is the Prime Minister of India with a decisive majority. This shows that people have seen through the waves of hit jobs by NDTV. Will the NDTV journalists one day sit and think about the sins they committed for more than a decade against Narendra Modi?

  Muzzling the whistleblower Income Tax Officer

  While NDTV was all out enjoying during the UPA tenure, its misfortunes started when an honest Income Tax Official S K Srivastava, IRS detected frauds in accounting in early 2006. He found that his junior Income Tax official Shumana Sen IRS was conniving with NDTV in fudging the accounts[9]. Shumana Sen was the Assessing Officer of NDTV’s Income Tax circle and her husband Abhisar Sharma was a journalist cum news presenter of NDTV. This itself is a serious Income Tax violation in that Shumana Sen had never declared to the department that her husband was a staffer of the company on which she was assessing tax.

  Srivastava first found the fraud committed by Shumana Sen by illegally granting a reimbursement of Rs.1.41 crores ($325,000[10]) to NDTV. He then found a series of favors she received from NDTV for hushing up the fudging in accounts by the TV channel, which employed her husband at an exorbitant salary of more than Rs.15 lakhs per annum in 2005, while most of the prominent journalists were getting around half of that. Many favors were granted to Shumana Sen including foreign vacations. Srivastava also found that another lady officer Ashima Neb IRS was also part of this corrupt racket.

  Income Tax Commissioner Srivastava did a deep dive into NDTV’s Income Tax Returns. He found several illegalities and money routing (laundering) through a series of shell companies floated abroad. He found similarities in NDTV schemes that mirrored those of Chidambaram in many of these money trails. Srivastava then went on record and started reporting to higher-ups on his findings. And that is when problems started for him.

  NDTV’s mentor Finance Minister Chidambaram became furious and Srivastava started facing his wrath. Many false cases including sexual harassment were slapped on Srivastava by the department. He was suspended from service. All attempts were made to ruin him financially and mentally. He started meeting many public-spirited persons and media persons and all kept quiet initially. Nobody dared to act on the revelations of an Income Tax Commissioner, fearing the clout of NDTV and Chidambaram. He was hounded like a mad dog by the venal interests.

  These atrocities against the honest officer came to public domain only after Chidambaram left Finance Ministry in December 2008 to become the Home Minister. Pranab Mukherjee took a lenient view by stopping the illegal orders issued against Srivastava. Meanwhile, Srivastava got the support of noted journalist and financial analyst S Gurumurthy, veteran lawyer Ram Jethmalani and noted activist Madhu Kishwar. if these three had not turned-up, the evil forces would have finished off Srivastava, who was by then in considerable mental distress.

  The country was witnessing an anti-corruption wave after the exposé of 2G Scam. Srivastava also started filing complaints in several forums. Due to his mental condition at that time, he was fined by some courts due to the harsh language used in his petitions. Meanwhile Chidambaram was back in the Finance Ministry in mid 2012 and started unleashing all dirty tricks against Srivastava by stalling to re-instate him. In every forum, the government lost its service cases against Srivastava and Chidambaram was busy with his machinations from the back end to prevent him from getting back into service.

  But time has proved that most of Srivastava’s findings were correct. His doubts on the money laundering through shell companies floated abroad are now proved right. All the allegations launched against Srivastava were found manipulated and wrong. The NDA Government led by Narendra Modi re-instated him back in service.

  The Income Tax investigation found that Journalist Abhisar Sharma’s Gross Unlawful income was Rs. 4.08 crores ($610,000). His wife, IRS Officer Shumana Sen’s Gross Unlawful income was Rs.7 crores ($1.046 million[11]) and her partner in crime IRS Officer Ashima Neb’s Gross Unlawful income was Rs. 2.93 crores ($438,000) . Based upon Income Tax findings, CBI also registered preliminary enquiry against these people. (Annex 1).

  Minority shareholder revolts

  NDTV started facing the music of law when in 2013, its minority shareholders Sanjay Dutt and Sanjay Jain of Quantum Securities Private Limited, approached Securities and Exchange Board of India (SEBI) with a series of complaints. These complaints exposed a long list of violations of Promoters and key management of NDTV by fudging accounts, money laundering by floating shell companies across the world. These complaints became the real turning point, forcing Income Tax and Enforcement Directorate to act when the NDA Government came to power.

  But the Finance Minister Arun Jaitley was doing his best to put hurdles in every action of the Income Tax, SEBI and Enforcement Directorate. Now NDTV’s lootings are on the radar of CBI and Delhi Police’s Economic Offences Wing (EOW) too and it is rumored that a Preliminary Enquiry (PE) or a Regular Case (RC) is likely to be registered soon.

  Meanwhile, Prannoy Roy tried every trick in the book to discredit Sanjay Dutt and Sanjay Jain. Prannoy even filed a false case of extortion against the minority shareholders! However post a proper investigation, the honest officers of Delhi Police rejected to file the case (an FIR), after finding that all allegations made were baseless/ fabricated. Prannoy Roy and gang had called the minority shareholders for compromise talks, led them along by spinning stories and loose talk at NDTV office and secretly recorded the conversations and gave to police selected videos and audios of some of the heated conversations related to money settlement. Delhi Police found the fraud and rejected the case and specifically mentioned in the reports that discussions were for legitimate dues to Sanjay Dutt and Sanjay Jain. Though many corrupt politicians put pressure on Delhi Police in 2016 to register a case against the minority shareholders, the Police resisted undue pressure and remained firm on the legitimate investigations. Why would two persons who (on invitation) went to NDTV office and carry out extortion/ threaten them? The NDTV management was trying to trap them in a false case through a fake sting operation.

  A little background on Sanjay Dutt and associates (Quantum Securities and other companies linked to him is relevant here). Sanjay Dutt has known Prannoy Roy and Vikram Chandra for over 3 decades as a close family friend and of course, Vikram Chandra was in the same school as Sanjay Dutt in Dehradun in 1980’s. In fact, it was in 2006 that Vikram Chandra approached Sanjay Dutt (a successful equity broker and qualified chartered accountant) to assist NDTV in raising funds overseas and working along with their team as consultants. When Sanjay Dutt along with his colleague Sanjay Jain took up the consulting assignment with NDTV, Sanjay Dutt and his associate companies/ family held substantial shareholding in NDTV. The shareholding at that point of time was close to 2% and then it went up to 3% or say around 17 lakh shares. Besides this pecuniary interest, Sanjay Dutt and Sanjay Jain (also a chartered accountant with substantial experience in financial markets) were also offered as incentive shares in the foreign subsidiary of NDTV (NDTV Networks Plc) as stock options/ milestone based incentives. This incentive was around Rs.40-45 crores (clearly documented in the Delhi Police investigation) based on the fact that they helped in raising close to 250-270 million USD for NDTV in a short span of 18-24 months from June 2006 to May 2008.

  It is believed that the main reason of the fall out between Dutt and Jain with NDTV was the fact that Prannoy Roy did not honor his commitment and in fact back stabbed them by throwing them out and accusing them of causing loss to NDTV (as stated in the Police Complaint also). Further, it is relevant here that when Sanjay Jain and Dutt quit in May – June 2008, the shareholding of Dutt associates (in NDTV) was worth over Rs. 75-80 crores (close to1.7 million shares at 450/- a piece). One learns that contrary to what Prannoy Roy did to Sanjay Dutt and Sanjay Jain, they (Dutt and Jain) still did not tender their shares in the open offer (that was ongoing when they quit in June-July 2008). In fact, they continued to believe in NDTV and did not want to let down Prannoy by saddling him with their shares as every share tendered in the open offer (made by Prannoy and Radhika) were accepted at the then offer price that would have led to substantial profits to Dutt and associates. Post the fallout, they sold nearly all their shares at substantial loss as the price from a high of Rs. 500 odd fell to Rs. 26 in 2010-2011.

  Table 2 below shows the ownership details of the Roys and how they committed fraud.

  Table 2. Fraudulent trades/shares sales & purchase to hoodwink shareholders, tax authorities, SEBI and MIB

  Books / Balance Sheet of RRPR Holding Pvt. Ltd.

  Date

  Particulars from RRPR Holding Pvt. Ltd Books/Filings

  No. of Shares

  Cost per Shares (Rs.)

  Total cost of acquisition Rs.

  Cumulative Balance of Shares held

  %age of stake in NDTV

  Comments/ Explanations/ Notes

  3 Mar 2008

  Purchased in open offer

  97,95,434

  438/ 98

  429,99,99,618

  97,95,434

  15.64

  Financed with India Bulls Loan with a misstatement in the Offer Document that Promoters had the resources in Dec 2007

  14 Jul 2008

  Sold

  (38,03,728)

  446

  1,69,73,38,496

  59,91,706

  9.55

  As agreed in a covert understanding / binding agreement with Goldman Sachs on 7.3.2008 in violation of SEBI Disclosure and Takeover Regulations

  8 Aug 2008

  Sold

  (12,49,985)

  409

  51,07,03,247

  47,41,721

  7.56

  - Same as above - In addition, a covert agreement to appoint a Goldman nominee on the Board of NDTV.

  3 Aug 2009

  Purchased from Mrs. Radhika Roy

  57,81,841

  4

  2,31,27,364

  1,05,23,562

  16.78

  Once again part of an illegal & covert agreement (dated 21.07.2009) to sell 26% stake in NDTV to VCPL. These were done to facilitate VCPL to get 26% in RRPR Holdings and transfer of ownership of RRPR to VCPL

  3 Aug 2009

  Purchased from Dr. Prannoy Roy

  57,81,842

  4

  2,31,27,368

  1,63,05,404

  26

  - Same as above - VCPL paid Rs. 350 crores for a 26% stake in NDTV at a valuation of 1346 crores vs. market price of 795 crores.

  8 Mar 2010

  Shares sold to Mrs. Radhika Roy

  (34,78,925)

  4

  1,39,15,700

  1,28,26,479

  20.45

  All the March 8th, 2010 trades were done to pass illegal gains (as established by Income Tax Dept) to Radhika Roy and Prannoy Roy

  8 Mar 2010

  Shares sold to Dr. Prannoy Roy

  (34,78,925)

  4

  1,39,15,700

  93,47,554

  14.50

  - same as above -

  8 Mar 2010

  Purchased from joint A/c

  48,36,850

  140

  67,71,59,000

  1,41,84,404

  22

  These same day trades of buying and selling with a price differential of over 98% from market price. All done only to generate illegal (hawala) gains for Radhika Roy and Prannoy Roy. This enabled them to siphon VCPL money into personal accounts.

  8 Mar 2010

  Purchased from Mrs. Radhika Roy

  23,14,762

  140

  32,40,66,680

  1,64,99,166

  25.60

  8 Mar 2010

  Purchased from Dr. Prannoy Roy

  23,14,762

  140

  32,40,66,680

  1,88,13,928

  29.19

  Even if one were to estimate conservatively, on July 21 2009, (shown in the table above as on Aug 3, 2009 giving time for the paperwork to be completed) the shareholders of NDTV were cheated by Rs. 108 crores or Rs. 86 per share when the market price itself on that day was Rs. 127. Another glaring fact – look at the trades that happened on March 8, 2010. The share price was either Rs. 4 a share or Rs. 140! The Roys made a killing on that day!!!

  As of May 2016, the shareholding pattern, per public records (Bombay Stock Exchange filings) is shown in the Figure 1 below:

  Figure 1. NDTV Shareholding pattern (45K is 45,000)

  Ever since 2012-2013, SEBI did not take any action on the wrongdoings by Prannoy Roy and Radhika Roy that caused substantial losses and personal gains to them. In fact, SEBI kept silent on the minority shareholder’s series of complaints and was forced to act only after the shareholder approached Delhi High Court. It is believed that the current SEBI Chairman along with Finance Ministry’s senior officials were forcing SEBI to keep silent and it was only the Delhi High Court that ordered Enforcement Directorate and Income Tax Department to file probe status of the minority shareholder, Quantum Securities Pvt. Ltd’s complaints on January 12, 2017. Not only on the complaints filed by the petitioner, Justice Sanjeev Sachdeva also ordered the agencies to file probe status of all complaints against NDTV for the past six years. The other complainants were BJP leader Subramanian Swamy, journalist and financial analyst S Gurumurthy, former Finance Minister Yashwant Sinha, former Chief Justice of India R C Lahoti, former Punjab DGP K P S Gill and whistleblower Income Tax Commissioner S K Srivastava. The larger question is why ED, SEBI and IT sat on these complaints filed by prominent persons from 2010? The answer is simple: SEBI, ED and IT are under Finance Ministry and all Ministers – P Chidambaram, Pranab Mukherjee and Arun Jaitley - from 2004 were protecting NDTV.