At last, the long arm of law has started catching up the NDTV Frauds. The Income Tax Department (ITD) in a bold move, attached 30 percent shares of NDTV held by Prannoy Roy’s shell company RRPR Holding Private Limited. This could be a major blow to NDTV as it happened while the stock market operators were busy analysing whether Mukesh Ambani had acquired around 51 percent shares in NDTV, after the exit of Spice Jet owner Ajay Singh’s attempts to buy NDTV.
In nutshell, NDTV is being screwed Left, Right and Centre by the action of the ITD and the Narendra Modi Government deserves all credit for fixing the frauds of NDTV.
Not only NDTV but now the Promoters personally are in trouble with the ITD for premeditated tax evasion. Besides the humongous NDTV liability, RRPR Holding P Ltd (Promoter) has a tax demand close to 350-400 cr inclusive of Tax and penalties along with interest. This is arising out of the dubious transactions it did with a RIL Group company – Vishvapradhan Commercial P Ltd. in August 2009 and March 2010. The provisional attachment of 30 percent shares of Radhika Roy Prannoy Roy (RRPR) Holdings Pvt limited is valued at Rs.116 crore as per the current value of shares of NDTV. Narendra Modi Government’s bold move is a message to the erring corporate world. NDTV’s declaration to Stock Exchange about Income Tax’s provisional attachment is published at the end of this article. Of course, Radhika Roy and Prannoy Roy are expected to challenge in legal forums against this provisional attachment and the ITD will be ready to counter it. So it can be safely said that the last word in this saga has not been said yet.
The next question that would be on everyone’s mind is how will the ITD recover the balance of Rs.309 crores or more. The main promoters Prannoy Roy and Radhika Roy own around 30 percent shares in NDTV. And the balance value will change according to how shares of NDTV will fare in the market. The steep rise in the value of a loss-making company that was facing several probes is in itself something that is worthy of investigation. PGurus had written about this a few days ago, on this meteoric rise in share price.
After today’s ITD action, NDTV is facing bad times. How long can NDTV survive is the biggest question now. Since NDTV does not have the money to pay the fine, these shares wil be under the custody of ITD which will ultimately try and recover the money by selling the shares in the open market or to a potential buyer. In nutshell, NDTV is being screwed Left, Right and Centre by the action of the ITD and the Narendra Modi Government deserves all credit for fixing the frauds of NDTV.
NDTV statement on RRPR: