NDTV closing down? Auditor’s Report tells that NDTV is not a Going Concern citing huge losses and liabilities

Citing huge losses and liabilities, the auditor of New Delhi Television Ltd. (NDTV) has warned the Board of Directors of the TV channel that the company is not a “going concern”.  Though NDTV has not informed the Stock Exchange about the exact financial position, the Auditor’s Report submitted to the Exchange details the grim situation of the controversial channel facing more than Rs.1000 crore tax dues[1].

In Auditor’s language “not a going concern” means the firm is approaching bankruptcy and assets are expected to be liquidated. If a business is not a going concern, it means it’s gone bankrupt and its assets were liquidated.

“We draw attention to Note 1 of the statement wherein it is explained that Company, which runs television business, has incurred as net loss of Rs.10.16 crores and Rs.1.17 crores during the quarter and six months period ends 30 September 2019 and, as of that date, the Company’s current liabilities exceed its current assets  by Rs.88.92 crores.

“These conditions, along with other matters described in the note, indicate that a material uncertainty exists that may cast significant doubt on the ability of the Company to continue as a going concern. Management has stated that the Company has initiated certain strategic and operational measures included in the note to mitigate the uncertainty. Accordingly, they have prepared the Statement on a going concern basis. Our conclusion is not modified in respect of this matter,” said the Auditing firm BSR & Associates LLP to the NDTV’s Board headed by Prannoy Roy, who is facing series of tax violations, money laundering, bank frauds cases.

The Auditor’s Report also shows that the NDTV’s many subsidiary firms and joint ventures accounts were not fully available to them. Promoters Prannoy Roy and wife Radhika Roy is an accused in the case registered by the Central Bureau of Investigation (CBI) in June 2017 for the ICICI Bank loan fraud. The agencies have found that the Roys have used the bank loan to buy a palatial home in South Africa and recently they were blocked from leaving India at the Mumbai Airport.

The CBI has also registered a second case against the husband and wife along with former Managing Editor Vikram Chandra for floating more than 30 shell firms across the globe and engaged in money laundering and Foreign Direct Investment (FDI) violations. The agencies have found that FDI violations happened during the tenure of the jailed Finance Minister P Chidambaram. The Auditor’s Report also shows that Aircel-Maxis scam accused Malaysian Telecom firm Maxis’s TV channel Astro Avani Network in Malaysia is an associate of NDTV.  The Enforcement Directorate (ED) has already reported that more than Rs.250 crores were siphoned to NDTV in connection with Aircel-Maxis scam.

The 11-page Stock Exchange communication by NDTV attaching the Audit Report is published below:

NDTV Stock Exchange Nov 12, 2019 by PGurus on Scribd

References:

[1] The tax dues of NDTV are Rs.864 crores. Income Tax Dept. should attach the Bank accounts to recover the dues – Feb 2, 2018, PGurus.com

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