Last updateMon, 13 Nov 2017 4am

Against fraud? Or Against freedom, Mr Roy?

Against fraud

The government has finally acted against Mr and Mrs Prannoy Roy and NDTV Ltd for fraud and deceit, which has been the subject matter of litigation in courts. Before the high financial rise of NDTV began, one must remember that when the UPA assumed office in 2004, NDTV had a huge cash loss of Rs 248 crore. It had no funds even to pay salaries, and its shares were trading at less than par. Its fortunes soared after the UPA came to power, and it received funds through a host of shell companies floated by it after 2004.

Tax evasion, suspected money-laundering

Between 2006 and 2010, NDTV India floated some 20 wholly-owned subsidiaries in different parts of the world - seven in Mauritius, eight in India, two in the Netherlands, one in London, one in UAE, and one in Sweden. All of them were letter-box companies, resting only on the valuation of NDTV Ltd. These subsidiary companies raised $417 million. Of this, $310 million was raised through a wholly-owned subsidiary, NDTV Network PLC UK, and $117 million through the sale of the channel NDTV Imagine to GE Corporation controlled by Universal Studios - all through private negotiation and private placement. Out of the $417 million, $267 million was invested by GE Corporation directly or indirectly. Just a reference to the emails obtained by the Income Tax authorities shows how the Roys and the other directors of NDTV were struggling to camouflage the huge monies received, not knowing how to camouflage the funds before the tax authorities. All this happened in 2008.

E-mail dated 22.05.2008 at 3.06 P.M. by Vivek Mehta from Price Waterhouse Coopers to Pronnoy Roy: “Subject: Re: FW: Pres Announcements etc “Dear Pronnoy, Here is a shot at it, based on your draft appreciate your problems but honestly the problem could become worse if we give a handle to the tax authorities. I am concurrently discussing with other partners now the draft below. Let’s get on a call ASAP, Regards Vivek”.See the warning about giving a “handle to the tax authorities”.

E-mail dated 21.05.2008 at 10.16 P.M. (by Vivek Mehta from Price Waterhouse Coopers to Pronnoy Roy): “Subject: Press Announcements etc. Dear Pronnoy & all above. Now that we are reaching the conclusion I wanted to remind everybody that all press releases… stock exchange releases etc etc both by NDTV & NBCU should be whetted by us. We must ensure that what is stated is that NBCU is subscribing for a sum of & 150 m in NDTV Networks group company Overseas for an effective 26 percent stake. We must not mention that NDTV is receiving the 150 m as dividend or otherwise. If asked a question what will the money be used for??? We need to decide how to answer this question carefully. Thanks Vivek”.

Note the caution “not to mention NDTV is receiving 150m as dividends or otherwise”. Even the question what the money will to be used for will have to be answered carefully.
E-mail dated 22.05.2008 at 02.09 P.M. (by Pronnoy Roy to Vivek Mehta from Price Waterhouse Coopers): “Subject: Re: FW: Pres Announcements etc. For everyone …..this is very important…Could we please have a draft press release Vivek….which we can use & send to nbcu……If possible, it’s important that the press release should make clear that the money comes in to NDTV and does not stay in Networks”.

Note the caution that “the money comes to the networks [subsidiaries] but does not stay there.”
E-mail dated 22.05.2008 at 3.06 P.M. (by Vivek Mehta from Price Waterhouse Coopers to Pronnoy Roy). “Subject: Re: FW: Pres Announcements etc Pronnoy….I need to start with a base draft…can somebody give that to me. Your second requirement is something I would avoid saying…. let’s discuss after I have seen the base draft. BR Vivek”

Author: S Gurumurthy

Published: June 06, 2017 (First published on

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