NDTV promoter Prannoy Roy has been caught in the crosshairs of a tax probe, which he feels is being used by the government to harass him and muzzle his news organisation. Photograph: (Zee News Network)
Sources say the recent CBI raids on the Roys were part of an ongoing investigation which began during the Congress-led United Progressive Alliance (UPA) regime in 2011. The Roys have also been accused of defaulting on a loan, an allegation stoutly denied by them
Founders of NDTV -- Prannoy Roy and Radhika Roy -- are under the taxmen's scanner for not disclosing income amounting to Rs 1,600 crore, WION's Kartikeya Sharma has learnt.
Government officials and highly-placed officials in the Income Tax Department said the recent Crime Bureau of Investigation (CBI) raids on the Roys were part of an ongoing investigation which began during the Congress-led United Progressive Alliance (UPA) regime in 2011.
The sources, wishing anonymity, also accused the Roys of floating 32 paper companies, including 14 foreign shell companies.
Notably, the 14 shell companies (except the one at Mauritius) were intentionally dissolved, they claimed.
"These paper companies claimed to raise funds through unidentified entities situated in British Virgin Islands , Cayman Islands, UK, USA, Switzerland, Netherlands etc. during the financial years 2007-2009. These claims were found to be false during investigation by Income Tax Department (sic)," they further said.
Authorities also said that NDTV had only two subsidiaries in India until 2006, but expanded in the next six years to "launder funds so that it became difficult" for tax officials to track them down.
The Roys have also allegedly breached provisions of the Foreign Exchange Management Act (FEMA). They have benefited by around Rs 2,030 crore, according to sources.
On June 5, the CBI conducted searches at NDTV offices and residences of the Roys in New Delhi and Dehradun for allegedly defrauding ICICI Bank to the tune of Rs 48 crore.
Read: What happened on June 5
NDTV immediately slammed the raids as a "witch-hunt" and "a blatant political attack on the freedom of the press".
Prannoy Roy also claimed innocence during a two-hour event at Press Club of India recently, accusing the government of browbeating his news channel.
“I commit that Radhika, I and NDTV have never touched one rupee of black money. We have never bribed one person in our lives,” Roy told the gathering.
“It is a signal to all of us: We (the government) can suppress you even if you haven’t done anything.”
The following is the list of other allegations made against the Roys by the government and IT officials (ad verbum)
1. The search by Central Bureau of Investigation at the premises of Dr. Prannoy Roy, Mrs. 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.
2. 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.
3. NDTV, which is controlled by Dr. Prannoy Roy and Mrs. 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 the 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.
4. 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 Dr. Prannoy Roy and Mrs. Radhika Roy) and are presently underway. Assessment proceedings of unexplained funds of Rs. 400 crores in which funds were received from unknown entitites 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.
5. CBI registered a case against Dr. Prannoy Roy, Mrs. 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 – Dr. Prannoy Roy, Mrs. 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 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.
6.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