CBI RAIDS PREMISES OF NDTV FOUNDERS
Complaint by Quantum alleges ~48-cr loss caused to ICICI Bank to benefit NDTV promoters; channel claims witch-hunt, govt says law will take its own course
Officers of the Central Bureau of Investigation on Monday raided the residence of senior journalist and founder of listed broadcast er New Delhi Television( ND TV) Pr annoy Roy and other premises linked to the organisation. The CB I registered a case on a complaint by Quantum Securities that alleges R48- crore loss caused to ICICI Bank to benefit NDTV promoters.
Officers of the Central Bureau of Investigation (CBI) on Monday raided the residence of senior journalist and co-founder of listed broadcaster New Delhi Television (NDTV) Prannoy Roy and other premises linked to the organisation.
The CBI has registered a case against Roy, his wife and NDTV co-promoter Radhika Roy, their private firm RRPR Holdings and NDTV India. The First Information Report (FIR) also mentions “unnamed ICICI Bank officials” among the suspects.
The FIR, which has alleged criminal conspiracy and invoked the Prevention of Corruption Act, was based on a complaint by Quantum Securities, run by Delhi-based stockbroker and NDTV shareholder Sanjay Dutt. Dutt once shared a close relationship with the Roys. He has lodged several complaints against NDTV and its promoters with various agencies, including the Securities and Exchange Board of India (Sebi) and the income-tax department.
In the latest complaint, dated April 28, Quantum alleged “pecuniary loss of over ~48 crore to ICICI Bank, arising out of unlawful/undue favour and profit transferred to promoters of New Delhi Television — being Dr Prannoy Roy, Radhika Roy and RRPR Holding.” The complaint added “ICICI Bank allegedly conniving, committing fraud and entering into a conspiracy with promoters of NDTV to facilitate transfer of ownership of a news broadcasting company…toa khoka/shell company.”
Shares of NDTV tanked nearly seven per cent intra-day. The stock plunged 6.74 per cent to ~58.10, a 52-week low, on the BSE during the day. Later, it trimmed some of the losses and ended at ~60.45, down 2.97 per cent.
NDTV said it would fight the “witchhunt”. Calling the CBI action an attempt to undermine democracy, it said: “It is shocking that the CBI conducted searches on NDTV offices and the residence of its promoters without even conducting a Preliminary Enquiry. This is a blatant political attack on the freedom of the press, as sources confirm that under pressure, the CBI has been compelled to file an FIR based on a shoddy complaint by a disgruntled former consultant at NDTV called Sanjay Dutt, who has been making false allegations and filing cases in courts of law. So far, he has not obtained a single order from any of these courts. Legal analysts are astounded that where courts have rejected giving any order in all these years, CBI conducts raids based on what is a private complaint.”
NDTV said, “The allegation appears to be for a loan which has been repaid by Prannoy Roy and Radhika Roy more than seven years ago. Even though lakhs and crores of rupees of dues have not been paid by several industrialists and no criminal case has yet been registered against any of them by the CBI, it has chosen not only to register an FIR but also conduct a search for a loan which has been duly repaid to ICICI Bank. Moreover, ICICI is a private bank. The allegation that no disclosure was made to Sebi and other regulatory authorities is not only incorrect and false but also does not clothe the CBI with any power to register cases and search, which further amplifies the fact that the search by the CBI is only a witch-hunt against independent media. NDTV and its promoters have never defaulted on any loan to ICICI or any other bank. We adhere to the highest levels of integrity and independence. It is clearly the independence and fearlessness of NDTV’s team that the ruling party’s politicians cannot stomach, and the CBI raid is merely another attempt at silencing the media. No matter how much the politicians attack us, we will not give up the fight for freedom and the independence of media in India.”
In February, a Supreme Court judge had said the Prevention of Corruption Act cannot be applied on private bank executives, who are not public servants.
An ICICI Bank spokesperson declined to comment. However, private sector bankers said it was common to settle loans this way. “Otherwise it is almost impossible to resolve the issue of non-performing assets.” During the post-Lehman period, he said, bankers were unsure of the economy and banks would have rushed to make settlements. “Filing FIRs against private sector bankers would discourage them from settling cases.”
Information and Broadcasting Minister M Venkaiah Naidu said there was no political interference in the CBI raids. He said the law was taking its course. “If somebody does something wrong, simply because they belong to the media, you cannot expect the government to keep quiet,” Naidu told reporters.
The transactions in the NDTV case date back to the financial market meltdown in September-October 2008. The NDTV promoters, who faced margin calls from Indiabulls Finance as the company’s stock price tumbled from ~400-levels to below ~100, had struck an arrangement with ICICI Bank. A loan was raised from Indiabulls for an open offer, triggered because of a buyback of a stake sold to private equity player General Atlantic.
Citing balance sheets and other filings of RRPR Holdings, Quantum said ICICI Bank had granted a loan of ~375 crore at 19 per cent interest on October 23, 2008. Of this, about ~350 crore had been drawn. Total dues, along with interest, stood at ~396 crore. But, in August 2009, the bank entered into a one-time settlement with NDTV at ~350 crore. This, along with certain other dues, resulted in a loss of ~48 crore for the bank, alleged Quantum, and ensured gains for NDTV’s promoters.
The complaint explains the transaction between RRPR Holdings and Vishwapradhan Commercial, which enabled the repayment to ICICI Bank. The CBI FIR is silent about Vishwapradhan or entities associated with it, though it has mentioned “other unnamed persons”, leaving scope for additions at a later stage.
The complaint was filed over a month ago but the FIR was registered at 3 pm on Friday.
In a statement, the Editors Guild of India expressed its “deep concern over the raids conducted by the CBI”. “While the Editors Guild maintains that no individual or institution is above the law, the Guild condemns any attempt to muzzle the media and calls upon the CBI to follow the due process of law and ensure there is no interference in the free functioning of news operations,” it said. The statement was signed by Editors Guild President Raj Chengappa, General Secretary Prakash Dube and Treasurer Kalyani Shankar.
Minister of State for Information and Broadcasting Rajyavardhan Rathore said the government was committed to freedom of expression and would ensure a fair probe.
N Ram, former editor-in-chief of The Hindu Group of Publications, tweeted: “Those who value media freedom must speak out & act ‘cause they know that while nothing will happen in the end the process is the punishment.”
Leaders of the Congress, Trinamool and the Aam Aadmi Party slammed the raids and dubbed the move as one to silence independent voices.
Press Association President Jaishankar Gupta termed the raids “highly condemnable” and “a revengeful act”.