The Bombay Stock Exchange (BSE) on Tuesday issued a notice to New Delhi Television Ltd. (NDTV) on reports about Securities Exchange Board of India (SEBI) action against the TV channel’s illegal change in control to Vishvapradhan Commercial Private Limited (VCPL). “The Exchange has sought clarification from NDTV with respect to a news article appearing in the Business Standard on September 03, 2017 titled “SEBI issues show-cause notice to Vishvapradhan in NDTV case”. The said notice was published on the BSE website at 13:44 hours on September 5, 2017 when the Exchange noticed huge price movement with volumes in NDTV shares for two consecutive days.
On Monday and Tuesday, NDTV’s shares have registered a jump of around 40 percent. On Monday NDTV’s shares jumped from Rs.36 to Rs.46 and on Tuesday the shares touched Rs.57. On both the days they touched and closed at the maximum permissible limit of 20% for no apparent reason or price sensitive and material announcement. So what is cooking?
The Business Standard report was on Prannoy Roy’s controversial instance of insider trading and fraudulent deals in July 2009 for signing off control to VCPL, a company linked to Reliance Industries Group. The SEBI’s action is a nightmare to NDTV’s promoters Prannoy Roy and Radhika Roy as this doubtful deal with VCPL flouting all SEBI and stock exchange norms, is a blatant case of insider trading and securities fraud that happened in addition to the ICICI Bank loan case, which is now on the radar of the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED). The TV channel’s minority shareholders Quantum Securities has been complaining to all authorities including CBI, SEBI, Income Tax and ED on this dubious deal, which is nothing but an unimpeachable case of insider trading and manipulation of NDTV shares by Prannoy Roy and wife Radhika Roy. Of course, in addition to this, there are many other dubious deals that Roys have entered into with large Foreign Institutional Investors (FII)s that need SEBI action and are pending for over 3 years.
Meanwhile for the past two days complaints have been registered with authorities including Stock Exchanges and SEBI regarding the mysterious increase in prices of NDTV shares on the stock exchanges. On Monday and Tuesday, NDTV’s shares have registered a jump of around 40 percent. On Monday NDTV’s shares jumped from Rs.36 to Rs.46 and on Tuesday the shares touched Rs.57. On both the days they touched and closed at the maximum permissible limit of 20% for no apparent reason or price sensitive and material announcement. So what is cooking?
Many Stock brokers are sceptical about the reason for this unexplained rise of shares up to 40 percent in just two days, when the company is facing probes for financial irregularities from CBI, ED and SEBI and Income Tax. NDTV has not yet got any relief and nor has it filed an appeal in the Delhi High Court against the Income Tax Appellate Tribunal (ITAT) Order ratifying the Income Tax fine of Rs.525 crores. The company is facing a Foreign Exchange Maintenance Act (FEMA) violation case of ED for Rs.2030 crores and the ED has already declared that they have found money laundering angle in this case and that cases under the Prevention of Money Laundering Act (PMLA) would be registered.
The ED is also expected to register another PMLA case in connection with CBI’s First Information Report (FIR) against Prannoy Roy and wife for cheating ICICI Bank and other related irregularities stated in the FIR. The Delhi High Court also rejected NDTV’s two petitions seeking refund from Income Tax of around Rs.40 crores. Further, Delhi HC did not even issue a notice to CBI in a petition filed by NDTV and Roys for quashing the FIR. Delhi HC simply sought a status report to be filed by end of this month. The only solace the channel got from Delhi High Court was on August 31, in a 1999-2000 matter/Income Tax case in connection with business of software / content sale to Star TV–NDTV Joint venture deal. This case was totally irrelevant in connection with the ongoing big cases against the channel and Roys. The Income Tax has already issued NDTV to block its covert sale of assets showing that they owe around Rs.525 crores of tax dues. Further, Income Tax continues to proceed with its penalty proceedings against NDTV and also large tax evasion cases personally against Roys and their company – RRPR Holding P Ltd. Hence experts wonder what is the reason behind the huge rise in the share price of the financially beleaguered TV channel.
It would be interesting to read the response NDTV and Roys give to the stock exchanges after clarifications were sought yesterday. We hope they do come clean and disclose the truth behind the dubious Rs. 403.85 crore deal with VCPL in 2009 by virtue of which they made illegitimate gains and transferred covert control of NDTV. Of course, it’s just a matter of time that both CBI and ED are already on the job and will surely unveil the truth if Roys don’t come clean.
Meanwhile there have been sightings of Prannoy Roy in the Finance Ministry, meeting with the Finance Minister Arun Jaitley. What was discussed and why he met Roy are big questions, which only Roy and/or Jaitley can answer. Nevertheless, it shows poor optics on part of the Finance Minister.