NDTV was Launched in the 1980s, it was India’s first independent news network, entering the field at a time when the government-run Doordarshan had a monopoly over television content. Beginning with one show on that channel, it gained an early lead in viewership ratings, and dominated the advertising market. NDTV passed on its success to shareholders after the company went public in 2004.
While the network fought a losing battle to retain primacy, it plunged into acute financial distress. In 2008, as the media industry reeled from the global recession, NDTV found itself haemorrhaging money. Towards the end of the decade, the network fired hundreds of staffers in an effort to cut costs.
A series of financial transactions that the Roys have carried out from the mid 2000s onwards have been under close investigation by government agencies. If the agencies’ allegations are proven true, they could severely undermine NDTV’s hard-won reputation, and the trust Prannoy has been so keen to earn and retain. At least one of these chains of transactions casts doubt over whether the Roys are still in complete control of the network they founded and built.
In January this year, a stockbroker named Sanjay Dutt filed a writ petition in the Delhi High Court against the enforcement directorate, or the ED, and the directorate general of income tax investigation. Both are law enforcement agencies: the former is responsible for investigating and prosecuting crimes related to foreign funds and money laundering, and the latter deals with violations of tax laws.
Dutt, the director of a financial-services firm named Quantum Securities, owned around 125,000 shares in NDTV, representing a 0.2 percent stake. In 2013, he had filed complaints with these agencies, and other government bodies, alleging that NDTV and its promoters had violated a number of laws. In this year’s writ petition—a request for intervention from a court—he alleged that both agencies failed to act on his complaints.
Along with the government bodies, Radhika and Prannoy Roy are also named as respondents in Dutt’s petition. So is Radhika Roy Prannoy Roy Holdings Private Limited, or RRPR, an entity that the Roys set up in 2005, and in which they placed shares of the company beginning in mid 2008. This company proved to be central to a convoluted maze of transactions that the Roys carried out from 2008 onward.
The affidavits that the two agencies filed in response to Dutt’s petition make for remarkable reading. Both told the court that investigations into NDTV and its promoters have been underway since 2011, in response to a complaint by the BJP parliamentarian Yashwant Sinha. The documents reveal that the Roys are being probed for contraventions of tax laws and laws involving foreign money.
NDTV has not been charged for any of the violations identified in the documents. Nevertheless, these investigations raise the question of whether, despite its reputation as a reliable company, NDTV’s financial core may be rotting.
Courtesy- Carvan magazine
(Article was publish in magazine december, 2015 edition)