The Enforcement Directorate (ED) has issued a fresh showcause notice to NDTV in connection with a case of forex violation it is probing against the media company.
The notice has been issued for violations of the Foreign Exchange Management Act (FEMA) to the tune of Rs 3,000 crore.
“In respect of overseas investment made by NDTV, offences of Rs 582 crore related to contravention of substantive provisions of FEMA and the remaining contraventions of Rs 2,414 crore relate to delays in filing reports and other requisite information before RBI (Reserve Bank of India),” an ED statement said.
However, NDTV maintains that it is being targeted for its fair and independent journalism.
It calls the notice a persecution and intended to signal to other media houses that unless they fall in line, they will face similar consequences.
Raids on media owners are further evidence of this, according to NDTV website.
In 2015, however, when NDTV was slapped with a similar showcause notice in the case, it had informed the BSE of the development and called the notice “legally untenable”.
“….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 show cause 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),” the company had said in a filing to the BSE.
According to the ED, NDTV opened a company named NDTV BV in Netherlands sometime in mid-2000. This company further opened subsidieries in UK and Mauritius.
While the UK subsidiary was called NDTV Networks Plc. (NNPLC), in Mauritius two companies by the names of NDTV Mauritius Media and NDTV Worldwide Mauritius Ltd were opened.
According to the ED showcause notice, NNPLC secured permission from Foreign Investment Promotion Board (FIPB) to raise overseas funds through public offerings of equity shares and Alternate Investment Marketing listing at London Stock Exchange.
It also got permission to bring this money into India.
However, NNPLC raised funds by way of overseas loan, bonds and optionally convertible preference shares.
This way between March, 2007 and October, 2010, NNPLC raised US $ 170 million and brought in 163.78 million (Rs 725.56 crore) to its companies in India, the notice has said.
ED showcause notice says this was a violation of FEMA.