NDTV promoters Prannoy Roy, Radhika Roy booked for FDI rules violation

New Delhi: The CBI has booked NDTV promoters Prannoy Roy and Radhika Roy and others for allegedly violating foreign direct investment (FDI) rules in a 2007-09 investment, a charge denied by the company.

Besides the Roys, the agency registered an FIR against then CEO Vikramaditya Chandra as well as unidentified government officials on charges of criminal conspiracy, cheating and corruption, officials said on Wednesday.

A CBI team conducted searches at Chandra's residence on Wednesday, the officials said.

This is the second FIR against NDTV as the CBI is already probing a case of alleged bank loan default against the company.

Under the CBI scanner are mainly two transactions pertaining to investments in foreign subsidiaries of NDTV -- NDTV Networks Plc (NNPLC) and NDTV Networks BV -- based in London, United Kingdom, and Netherlands respectively, the officials said.

The agency has alleged that Fuse Media Holding LP and Jefferies International brought in funds to the tune of USD 120 million in NNPLC. While Fuse media purchased 4.5 to 5 per cent in NNPLC in March, 2007, funds by Jefferies were brought in by using step up coupon convertible bonds in May, 2007, they said.

The second set of transactions mentioned in the CBI FIR pertains to pumping of USD 150 million in Netherlands-based NDTV Networks BV by NBCU, a subsidiary of General Electric, US, the officials said.

NBCU transferred the amount from the account of its subsidiary Universal Studios lnternational BV, Netherlands on May 23, 2008, they said.

Through same transaction, NBCU also acquired a 26 per cent stake in NDTV Networks Plc (NNPLC), they said.

The convertible bonds worth USD 100 million were repaid by paying USD 72.40 million to investors in November, 2008 while 26 per cent share holding of NBCU in NNPLC was bought back by purchasing shares of NDTV Network International Holding BV, Netherlands from it for USD 12,472,750 to Universal Studio BV on October 26, 2009.

These transactions are allegedly sham transactions used for routing money in India, they said.

"It is alleged that NNPLC got approval from the FIPB Board in violation of laid down FDI provisions for Foreign Direct Investments (FDl) worth USD 130-160 million. Subsequently, NNPLC received total FDI worth USD 163.43 million till September, 2009. Further, it invested the said amount in various subsidiaries of NDTV through a web of complex transaction," the CBI has alleged.

The agency has alleged that Roys, KVL Naryanan Rao (since expired) and Chandra had entered into criminal conspiracy with unknown public servants with the object of bringing tainted money of unknown public servants through a web of complex transactions through the FDI route.

In a statement, NDTV strongly denied the CBI's allegations.

"NDTV and its founders have full faith in India's judiciary at this crucial time and remain committed to the integrity of the company's journalism. Attempts to silence free and fair reportage through malicious and fabricated charges will not succeed. This is not about a company or individuals but about a larger battle to maintain the freedom of the press, something which India has always been renowned for," it said.

As part of "the continued persecution of free press", it said, a new CBI case has been filed about a USD 150 million investment in NDTV's non-news business by NCBU, then owned by General Electric.

"The case makes the ludicrous charge that the transaction, declared to all relevant authorities in the US and India, laundered money for unknown public servants," it said.

The FIR is an outcome of a preliminary enquiry registered by the agency in 2016, the CBI officials said.

It is alleged that during May 2004 to May 2010, NDTV floated around 32 subsidiary firms all over the world, mostly in the tax havens of Holland, the United Kingdom, Dubai, Malaysia, Mauritius, etc.

The CBI said most of these companies allegedly had no business transaction and were meant for financial transactions to bring funds from abroad.

Terming the transactions a "sham", the agency alleged that funds were invested by unidentified public servants through NDTV and laundered back to India through multiple layers of complex transactions and shell companies.

"Proceeds of corruption of unknown public servants was invested through NDTV Ltd," it alleged.