NDTV founders Prannoy Roy and Radhika Roy are under the scanner of the CBI for allegedly causing a loss of Rs.48 crore to ICICI bank. This is not the first time that Prannoy Roy, the Managing Director of the channel, has come under the scanner of the elite investigation bureau.
In 1998, the CBI had filed an FIR against Roy and some others for allegedly causing a loss of approximately Rs.5 crore to Doordarshan.
The recent action of the CBI has come under scrutiny by a section of those supporting NDTV. They call it an affront to freedom of speech and accuse the Modi government of vindictiveness. The rationale NDTV’s supporters are giving is that the channel has been airing news and views critical of the government.
There is another section, including pro-Government and apolitical voices, who are justifying the CBI action on the grounds that no media house is above the law and that ‘freedom of speech’ cannot become the defense in a fraud case.
S Gurumurthy, the editor of the Tughlak magazine, wrote an article in The New Indian Express presenting a complete picture about the NDTV case and how the Income Tax authorities obtained emails from 2008 which “shows how the Roys and the other directors of NDTV were struggling to camouflage the huge monies received, not knowing how to camouflage the funds before the tax authorities.”
“Between 2006 and 2010, NDTV India floated some 20 wholly-owned subsidiaries in different parts of the world – seven in Mauritius, eight in India, two in the Netherlands, one in London, one in UAE, and one in Sweden. All of them were letter-box companies, resting only on the valuation of NDTV Ltd.,” Gurumurthy writes.
This brings us to the question: What is the valuation of NDTV?
In 2015, The Caravan had published an article urging the Modi government to investigate five media companies if it genuinely wanted to end crony capitalism. Those five were: News Nation, India TV, Network18, News24 and NDTV.
In his article, Gurumurthy draws attention to the NDTV’s frequently and drastically changing valuation.
“Leaving aside the complicated financial structure, on the Indian side, a Mukesh Ambani company gave a virtually interest-free loan to another company for acquiring 26% of NDTV shares for Rs.403 cr. The zero-interest bond is then transferred to another company belonging to Himachal Furturistic Group for Rs.50 crore — with the Ambani company incurring a loss of Rs.353 crore and claiming it as tax expense. Why should Ambani incur this loss for NDTV? Is it to fund the freedom that NDTV is talking about now or to buy it?
While the Ambani company purchased 26% NDTV shares for Rs.403 crore after valuing NDTV at Rs.1440 crore, it sold the same to Nahata of Himachal Futuristic who bought the 26% shares of NDTV for Rs.50 crore at a total valuation of Rs.192 crore. See the differing valuations. NDTV valued itself before the tax authorities at Rs.10,000 crore. It was valued at $2 billion by GE Corporation USA for one investment and at $200 million for another.
The Navin Jindal group and Agarwal Agro Tech group bought 15% of NDTV shares for Rs.26 crore on a value of Rs.173 crore. NDTV valued itself before SEBI at Rs.367 crore. Are these not indicative of huge valuation blues and tax issues?”
Things will become clearer only when the CBI completes an inquiry. What is certain is that there is no government’s vindictiveness involved in the probe against Roy as is being claimed by the media house’s defenders.