Decoding charges against NDTV: a red herring?

What did the Central Bureau of Investigation (CBI) hope to find during its search and seizure operation conducted at the residence of NDTV founders and promoters Prannoy and Radhika Roy? This and the million rupee question where it would lead to dominated discussion in both media and political circles on Monday in the wake of the ‘raid’.

While the Roys apparently stand accused of causing a loss of ₹48 crore to a ‘private bank’, ICICI Bank way back in 2010, there is no explanation why the bank did not move to recover the amount and why the CBI got into the act.

According to knowledgeable circles, the Roys had secured a loan of ₹375 crore from the bank at 19% interest sometime around 2009. However, they were later allowed a waiver of 10% which is said to have resulted in the ‘loss to the bank’. But ICICI and other banks, both private and nationalised, would have allowed such waivers to several other entities. Why single out NDTV?

NDTV, in an updated statement on the CBI raids on Monday evening, categorically said that the loan has been “duly repaid to ICICI Bank”. To substantiate its point, a copy of a document supporting it was also released along with the statement.

Sources told National Herald that while it remains to be seen if charges of dodgy business practices against NDTV finally stick, there would be a large number of businesses in the country which would have taken recourse to similar practices. Again, the question arises as to why single out NDTV?

These sources claimed that NDTV has been a victim of the economic meltdown of late 2008, when banks in the West collapsed following the sub-prime crisis. NDTV’s stocks had then crashed from ₹400 per share to ₹100 per share. But, just before the crash, NDTV had apparently secured a loan of ₹500 crore from India Bulls and Roys had pledged their shares in RRPR Holdings Private Limited as security.

It was to clear the India Bulls loan that the Roys are said to have sought and secured the loan of ₹375 crore from ICICI Bank. In 2010, Sunday Guardian accused the TV channel of pledging the shares to the private bank at a much higher value than the market price. They were then sued by the channel for defamation.

In 2013, lawyer Ram Jethmalani alleged that NDTV had concealed an income of ₹5,700 crore, laundering money worth ₹5,500 crore and evading taxes worth ₹3,500 crore.

In 2015, The Caravan magazine carried a cover story on NDTV in which it revealed that companies linked with Reliance Industries had secured almost one-third shares of NDTV, although Reliance categorically denied any “direct or indirect” interest in NDTV to Newslaundry.

Caravan had then alleged that Vishvapradhan Commercial Private Limited had borrowed over ₹400 crore from Shinona Retail, a wholly-owned subsidiary of Reliance with which it shared an address, before lending it to NDTV. It was alleged that the Roys had then been forced to sell their shares at ₹4 per share when the shares were trading at ₹130 at the time.

At this point, questions abound. Who avoided paying taxes? Reliance or NDTV? And, what did the Roys gain since NDTV has been in the red, reporting losses and has also fallen behind in the ratings?

Could the CBI raids be a prelude to a change of ownership? While Twitter for some time on Monday spoke of Baba Ramdev taking over the channel, a sharp rebuttal came in a tweet by NDTV anchor Nidhi Razdan. But the speculation refused to die.

Business journalists have pointed out that many other media houses and TV channels have questionable sources of finance and have manipulated account books to dodge tax liability. So, will all of them be made accountable now? Or, is it really a signal to the media to fall in line ?