Income Tax to probe NDTV’s Money Laundering through Cyprus also

Tax authorities suspect that money routing through Cyprus to purchase NDTV stock is Money Laundering

Tax authorities suspect that money routing through Cyprus to purchase NDTV stock is Money Laundering
Did NDTV route money through Cyprus too?

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]A[/dropcap]part from laundering money through Bermuda, Netherlands, UK and the Cayman Islands, Prannoy Roy had laundered money through Cyprus also. As per the Director General (Investigation) of Income Tax’s affidavit to Delhi High Court, the agency has sought details from their Cyprus counterparts regarding a transaction of around Rs.120 crores in 2005.

The Income Tax authorities suspect that this money routing through Cyprus is nothing but Money Laundering.

“Another FT & TR (Foreign Tax and Tax Research) reference was sent by Director of Income Tax (Investigation) – New Delhi on April 23, 2015 requesting for information under Exchange of Information Article under Cyprus DTAA into the tax affairs of NDTV (Cyprus NDTV M/s Global Investment Pvt. Ltd). The reports received from the Foreign Tax authorities (confidential in nature) have been sent to the respective Assessing Officers for appropriate action in the relevant assessment years,” said the 12-page affidavit filed by the Investigation wing of Income Tax.

The tax authorities were responding to the petition filed by the minority shareholder Sanjay Dutt in the Delhi High Court.

This transaction is believed to be the offloading of shares (around eight percent) by a firm, reportedly very close to a powerful political leader. The firm which offloaded its shares in NDTV is engaged in Transmission and Telecom business. These shares were reportedly acquired by General Atlantic through a circuitous route in Cyprus. The Income Tax authorities suspect that this money routing through Cyprus is nothing but Money Laundering. The agencies now doubt the eight percent shares of the NDTV was sold at an exorbitant rate in the Cyprus routed transaction.

There is one other aspect to this transaction, that of possible Insider Trading. To understand this better you need to read Pages 96-116 of a previous post in PGurus, dated Dec 12, 2016 titled Delhi HC raps SEBI for not acting on complaints against stock exchange violations of NDTV. Since we all want to cut to the chase, a brief summary is described below:
Synchronized Stock Transaction
The above figure shows a snapshot of activity on the Bombay Stock Exchange. On Dec 26, 2007, 4,836,000 shares (approx. 7.78% of NDTV) changed hands. NDTV is a Public company and the shares are traded on the open market where anyone can buy or sell NDTV shares. Yet, these shares were synchronized such that the shares sold by GA could only be purchased by NDTV! The bulk of the shares were bought for Rs. 400 a share, at about 10% less than the average price of a share of NDTV. The closing price of a share on the previous trading day (Dec. 24, 2007) was Rs.435. On the 26th, NDTV shares traded as high as Rs. 482 and as low as Rs. 400. Common public missed out on the 10% discount at which the shares were offered but how did this happen? Who else was in on the trade? Or was this a Dark Pool trade? Publicly traded exchanges such as the BSE are not supposed to have Dark Pools.

Prannoy Roy may be thinking that he can create a Reality Distortion Field to make everyone believe that he is being targeted. But the facts never lie. This is one more thing that he needs to answer.

Note:
1. Text in Blue points to additional data on the topic.

2 COMMENTS

  1. Prannoy Roy is complete money launderer. 8% of NDTV shares sold for Rs.120 crore in 2005 smells rat. This is a inflated sale. Some time they sell their shares for just Rs.4 when market rate was Rs.140. SEBI is still sleeping? Clear white collar crime gang.

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