ED issues show-cause notice to NDTV for FEMA violation

The Enforcement Directorate (ED) on Thursday served a show-cause notice on news broadcaster NDTV for allegedly flouting foreign exchange regulations in availing of overseas and foreign direct investment facilities of over Rs 4,300 crore.

In a statement, the financial probe agency said: “The investigation showed FEMA (Foreign Exchange Management Act) contraventions relating to receipt of foreign direct investment by NDTV to the extent of Rs 1,637 crore and the other relating to overseas investments to the tune of RS 2,732 crore.”

The show-cause notice, issued under the FEMA, was issued to the founders and executive co-chairpersons of the group — Prannoy Roy and Radhika Roy, journalist Vikram Chandra and a few others.

THe ED also issued notice to Harpreet Singh Duggal of NGEN Media Services Pvt. Ltd, Anshuman Misra of Turner General Entertainment Networks India Pvt Ltd, Sameer Chandran Nair, who was earlier Director in NDTV Imagine Pictures Ltd and Alliance Lumiere Ltd, Grant Scott Ferguson of South Asia Creative Assets Ltd.

The financial probe agency said: “The investigation revealed that NDTV received FDI of Rs 725 crore and that only CCEA (Cabinet Commiittee on Economic Affairs) was competent to permit FDI in excess of Rs 600 crore.”

“In the case of NDTV no CCEA approval was taken,” it said, adding that the FDI was projected as below Rs 600 crore as part of “larger conspiracy”.

“While applying for FIPB Foreign Investment Promotion Board) approval, NDTV projected FDI as varying between $130-160 million. Documents of FIPB section also projected FDI differently as Rs 585 crore ($130 million at Rs 45 per dollar).

“However, FDI finally received by NDTV was $163 million,” it said.

The ED also said that there were offences to the tune of Rs 1,378 crore in respect of delays in reporting and filing information with RBI (Reserve Bank of India) such as Foreign Inward Remittance Certificate, FCGPR, FCTRS etc. and delays in allotment of shares.

“Delays were also recorded in reporting and filing information with RBI such as ODA form, annual performance report etc. to the tune of Rs 2,286 crore,” it said.

It said that further, NDTV Imagine Ltd., then a subsidiary of NDTV Ltd. (now known as Turner General Entertainment Networks India Pvt. Ltd.), has also been charged with delays in filing and reporting information with RBI to the extent of Rs 853 crore.

NDTV Ltd’s another subsidiary — NGEN Media Services Pvt. Ltd., which has now been merged with Genpact India Ltd — has also been charged with delays in reporting and filing information with RBI to the extent of Rs 30.48 crore.