The Central Bureau of Investigation has denied charges of witch-hunt levelled by NDTV and has clarified that no premises linked to the news organisation was searched.
Chartered accountant Sanjay Dutt, who runs a stock broking firm, Quantum Securities Pvt Ltd had lodged complaints against NDTV founders Radhika Roy and Prannoy Roy, their company RRPR Holdings P Ltd and ICICI Bank.
Dutt as well as his partner Sanjay Jain had been with NDTV as financial consultants in 2006 but fell out with it within two years.
It was on one of Dutt’s complaints that CBI registered an FIR against NDTV founders Radhika Roy and Prannoy Roy, their company RRPR Holdings P Ltd and ICICI Bank, leading to raids on the Roys’ premises.
Dutt’s complaint accuses the Roys of criminal conspiracy to dupe ICICI of Rs 48 crore ,an amount that Dutt has calculated on the basis of an ICICI loan of Rs 350 crore to RRPR in 2008-09.
The CBI has clarified that raids have only been conducted at the offices and premises of the news channel’s promoters. “CBI has not conducted any search of registered office of NDTV, media studio, news room or premises connected with media operations. CBI fully respects the freedom of press and is committed to the free functioning of news operations,” the statement said.
“The investigation is being conducted as per the due process of law and under the jurisdiction of the court of law. The result of investigation will be filed before the competent court of law based on the evidence adduced during investigation,” the CBI said.
The CBI said “wrongly accusing” the agency of acting under pressure is “uncalled for and an attempt to malign the image of the CBI”.
In 2008, ICICI Bank gave the private holding company a loan of Rs 366 crore on personal guarantees of the Roys, who pledged their NDTV shares that were valued more than the prevailing price at the Bombay Stock Exchange.
The promoters of NDTV pledged their entire shareholding in NDTV as a collateral to ICICI for this loan, it alleged.
But this pledging of shares was not reported to the SEBI, stock exchanges and the Ministry of Information and Broadcasting, according to the CBI.
Such concealment was allegedly done as a creation of more than 61 percent voting capital, which was in violation of section 19 (2) of the Banking Regulation Act. It should not be more than 30 percent, the agency said.
Within a year, ICICI settled for foreclosure of the loan, agreeing to a part-waiver of interest that allegedly resulted in a loss of Rs 48 crore for the bank, the CBI’s formal investigations launched last week said. The Roys moved out an equivalent amount from RRPR’s bank account, it alleged.
“The allegations under investigation are not regarding the default in loan repayment, but relate to the wrongful gain of Rs 48 crore to the promoters: Prannoy Roy, Radhika Roy, RRPR Holdings Pvt Ltd.”
“And a corresponding wrongful loss to the ICICI bank arising from their collusion and criminal conspiracy.”
The agency said the complaint alleged the promoters of NDTV, acting in a criminal conspiracy with unknown officials of ICICI bank, violated Section 19(2) of the banking regulation act and also a “master circular” of the Reserve Bank of India.
The CBI added that ICICI bank took the entire shareholding of the promoters in NDTV, which comes to nearly 61%, as collateral and accepted prepayment of the loan by reducing the interest rate from 19% a year to nearly 9.5 %.
“As a consequence, causing a wrongful loss of Rs 48 crore to ICICI bank and a corresponding wrongful gain to the promoters of NDTV,” the CBI said.
NDTV had questioned CBI’s jurisdiction by stating that ICICI was a private bank. In response to this, the CBI cited a Supreme Court ruling which allowed it to probe private companies in cases falling under Prevention of Corruption Act.
Specifically, the CBI is investigating whether the loans obtained and repaid by the RRPR and the Roys amount to an offence under the Prevention of Corruption Act, 1988 (PCA).
NDTV’s statement issued, claims that CBI had no jurisdiction over a case relating to a private bank.
However CBI referred to a Supreme Court ruling that said the provisions of Prevention of Corruption Act, 1988 are applicable to the officials of private banks.
“Therefore, the CBI has jurisdiction to take up investigation of the cases of private banks.”
In his depositions made before public authorities, Dutt has stated that he and Jain quit NDTV as he became aware that “the real purpose was to route the money without any intention of paying taxes and in violation of various legal provisions”.
Dutt, who split from NDTV in 2008, filed his first complaint against the promoters in March 2013, with the Ministry of Corporate Affairs, according to the ministry.
RRPR Holding Private Limited is a Private Company incorporated on 19 August 2005. It is classified as Non-govt company and is registered at Registrar of Companies, Delhi. Its authorized share capital is Rs. 20,000,000 and its paid up capital is Rs. 100,000.It is involved in Other financial intermediation. This group includes financial intermediation other than that conducted by monetary institutions.
Prannoy Roy and Radhika Roy are the Directors of RRPR Holding Private Limited.