SEBI Inaction Part 4 – Who was behind VCPL?

Who is the real owner of NDTV? VCPL or ???

Who is the real owner of NDTV? VCPL or NDTV?
Who is the real owner of NDTV? VCPL or NDTV?

Part 1 of this series was a curtain raiser, describing four different set of SEBI violations committed by NDTV, on which the SEBI has yet to act. That Silicon Valley based firms were allowed to act as a conduit was described in Part 2. Even Goldman Sachs was not spared as it held some stock as part of a fund for a yet-to-be-named owner in Part 3. This is the concluding part.

ICICI Bank transaction under CBI scanner

In an earlier post titled At last CBI catches up with Prannoy Roy (PR) and Radhika Roy (RR) for ICICI bank fraud, I had written about how the promoters of NDTV, Prannoy Roy and Radhika Roy, borrowed money from ICICI Bank to purchase stock in NDTV (this is forbidden by the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI)) and then underpaid the Bank, in the process enriching themselves to the tune of Rs.92 crores ($15 million).

Who or what is VCPL?

Vishvapradhan Commercial P. Ltd. (VCPL) is a shell company, whose ownership has changed hands a few times. The entity itself has no employees, no products yet show significant income. In the NDTV matter, SEBI chose to take action against VCPL by issuing them a show cause notice and referring the matter to its Enforcement Division but conveniently forgot about the other signatories and parties to the agreement i.e. Prannoy Roy, Radhika Roy & RRPR Holding Pvt. Ltd. The following table describes the events that played out in the saga of ownership change (did it or did it not happen?) of NDTV to VCPL:

Sr. No. Date Event/ SEBI Violations
1 18 Jul, 2009 Vishwapradhan Commercial P. Ltd. (VCPL), an existing khoka/ shell company comes into the Reliance Industries Limited (RIL) fold, having 1 lakh (100,000) paid up capital & no business or assets.
2 21 Jul, 2009 VCPL signs a covert/ illegal agreement to acquire 26% stake in NDTV by having the option of controlling RRPR Holding P Ltd. (RRPR). RRPR is held 50% each by PR & RR and is a holding Co. of NDTV (shell Co. that only owned NDTV shares as the only asset and no employee or other asset). Do note, layering/ money laundering is clear in this case as Rs.403.85 crores (Rs.350 plus Rs.53.85 crores) is exactly the same amount to the last paisa paid by Reliance Ventures Ltd (RVL) to Shinano Retail P Ltd. and then onwards to VCPL and finally to RRPR to control NDTV. The sole objective being to hide the actual source of money. It is very much possible that RVL got this from some other party in India or abroad or maybe some sort of political or illegal money parked overseas.
3 3 Aug, 2009 RR and PR transfer 1.15 crores (11.5 million) shares of NDTV to RRPR (which by now is controlled by VCPL) at Rs.4 per share when marked price is Rs.135-140 per share on BSE. This is nothing but a blatant case of fraudulent, insider and bogus trade, thus violating SAST and all SEBI Regulations.
4 7 Aug, 2009

  • VCPL paid Rs.350 crores to RRPR for irrevocable right/ ownership of RRPR & also complete control on all other shares of PR and RR in NDTV. Thus, effectively RRPR gets complete control of NDTV i.e. effective control of 61% of voting rights of NDTV. Money comes into VCPL from another RIL Co. called Shinano Retail P. Ltd and this Rs.350 crores stake buy is at a substantial premium (70%) to market price. i.e. agreement mentions NDTV value at 1346 crores but market cap was Rs.800 crores.
  • From the above step both PR and RR along with VCPL violate SEBI laws i.e. Insider Trading, Fraudulent Trades (FUTP), Disclosure Laws and Takeover code (SAST). None of the above are disclosed to SEBI, BSE, NSE or the shareholders of NDTV.
  • Agreement of 21.7.2009 further, blatantly violates Ministry of Information and Broadcasting (MIB) laws applicable to News Cos. It is clearly specified in MIB Regulations that any change of control requires prior consent of MIB and of course Home Ministry security clearance for Directors and Management.

It is important to note that Rs.350 crores received is the amount RR and PR used to repay the questionable ICICI Bank Loan (under CBI investigation).

5 May – Jun, 2011 Further, VCPL had given a statement to DG Investigation Income Tax, New Delhi in May-Jun 2011 that Rs. 403.85 crores were given to RRPR without security & without interest in 2009 August and as it had an irrevocable option to convert this loan at any time into such number of equity shares of RRPR at par so as to own 99.99% of fully diluted equity of the Company (RRPR). Thus, in 2011 itself, DG Investigation and SEBI were clear that NDTV control had changed hands from the Roys to the RIL group. What is clearly evident is that some influential person (maybe political) suppressed this investigation and ensured that it was never pursued by the ED, SEBI or Income Tax Dept.
6 Oct 2012 More intrigue and blatant illegality takes place. VCPL, the controlling company of RRPR and thus NDTV further changes hands and is sold by RIL group to HFCL (Mahendar Nahata) group. So effectively as of today VCPL and thus NDTV is under legal control of HFCL Group and one does not know what control/ commercial agreements are executed for this. This fact has also been determined by Income Tax Dept and filed under affidavit in the Delhi HC. Finally, the question that remains unanswered is, who really controls NDTV and how did so many illegal actions and alleged dubious fund movements in shell companies take place in a span of 2 years? If this is not a matter of Insider Trading, Fraud, criminal breach of trust (public shareholder and public news broadcaster involved) then what would be classified as Insider Trading, Fraud and blatant violation of Tax laws, FEMA and PMLA?
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An inventor and out-of-the-box thinker, Sree Iyer has 37 patents in the areas of Hardware, Software, Encryption and Systems.

His first book NDTV Frauds has been published and is an Amazon Bestseller.It ranked second among all eBooks that were self-published in 2017.

His second book, The Gist of GSTN which too is available on Amazon as an e-Book and as a paperback.

His third book, The Rise and Fall of AAP is also available in print version or as an e-Book on Amazon.

His fourth book, C-Company just released to rave reviews and can be bought as a print version or as an e-Book on Amazon.
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