More Trouble for NDTV: Income Tax Dept to Raid NDTV Soon for 1600crore Scam?

In response to the press conference organised by NDTV, the central government has made it clear that Income Tax department is looking into undisclosed income of Rs 1600 crore by Prannoy Roy, Radhika Roy and companies controlled and associated with NDTV group. Sources say that inquires in this regard were initiated by the tax authorities in 2011 when UPA 2 was in power.

Sources told DNA that assessment of the concealed income of Rs 642.5 crore relating to NDTV Group and related companies was done during UPA regime on February 21, 2014. Re-assessment proceedings for concealment of Income of Rs 403.85 crore have been initiated against M/s RRPR Holdings Pvt. Ltd. (owned by Prannoy and Radhika Roy) and are presently underway.

The Reserve Bank of India too seemed to have detected violation of several provisions of FEMA by the NDTV Group to the tune of Rs 2030 crore. The Enforcement Directorate in this regard has issued a show cause notice for contravention of FEMA provisions.

The investigating agencies say that NDTV, which is controlled by Prannoy Roy and 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 1,100 crore using these paper entities.

Sources in the investigating agencies say that 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.

The authorities claim that 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.

Assessment proceedings of unexplained funds of Rs 400 crore in which funds were received from unknown entities in British Virgin Islands and Cayman Islands are in progress. Concealed income of Rs 94 crore – Rs 47 crore each by Radhika Roy and Prannoy Roy- arising from manipulation of sale and purchase prices of shares, has been assessed and confirmed in the First Appeal also.

CBI earlier had registered a case against Prannoy Roy, Radhika Roy, M/s RRPR Holdings Private Limited and others on 2nd June on the complaint of a shareholder of NDTV and ICICI Bank. However, NDTV continues to deny any wrongdoing and has stated that investigation is a result of witch hunt.