The Enforcement Directorate has slapped a show cause notice of Rs2,030 crore on NDTV for allegedly violating FEMA provisions for “illegally routing” huge funds through its foreign subsidies. NDTV said it would “explore legal options”.
The notice served earlier this week to NDTV promoters Prannoy Roy, wife Radhika Roy and senior executive KVl Narayan Rao said the TV channel Group violated RBI provisions. The ED said the RBI had issued a series warnings in this regard.
“NDTV ltd raised funds outside India to the tune of $170 million through its london based company called NNPlC and brought $163.78 million in its group companies in India during the period March, 2007 to October, 2010. RBI has pointed out that bringing funds in its group companies by NDTV ltd from NNPlC is not a genuine and bonafide business activity and is a contravention of FEMA,” said a file noting of ED.
“There was also a violation of routing of around Rs500crore through Mauritius subsidiary of NDTV. RBI has pointed out that bringing funds in its group companies by NDTV ltd from its overseas subsidiaries is not a genuine and bonafide business activity. In all, Rs113.31 core was illegally routed by NDTV through its shell companies floated abroad,” ED officials claimed. NDTV on Thursday informed the Bombay Stock Exchange about the development and said the notice was not “legally tenable” and would explore legal options.
“… the company along with Dr. Prannoy Roy, Executive Co-Chairperson, Mrs. Radhika Roy, Executive Co-chairperson, Mr. K.V.l. Narayan Rao, Executive Vice Chairperson and NDTV Studios ltd. (erstwhile subsidiary of the Company since merged with the Company) have on November 19, 2015 received a showcause notice from the Directorate of Enforcement as to why adjudication proceedings should not be held for alleged contraventions of provisions of FEMA (Foreign Exchange Management Act),” said the company in its filing to BSE ltd.