The Central Bureau of Investigation, while closing its corruption and fraud case against NDTV founders Prannoy Roy and Radhika Roy in October, said that there was no criminal wrongdoing in a Rs 375-crore loan extended by ICICI Bank to their company RRPR Holdings Private Limited, reported The Wire on Wednesday.
A Delhi court took note of the agency’s closure report in an order dated November 12.
The closure report, accessed by The Wire, said that the loan, alleged in 2017 to have violated banking regulations, was in fact a normal business transaction.
The Central Bureau of Investigation said that the loan taken by NDTV was not an “isolated case” and that ICICI Bank had been “extending such loan facilities to other similarly rated companies”.
The central agency investigated allegations against the Roys pertaining to criminal conspiracy, collusion with ICICI Bank officials and failure to disclose the pledge of shares to regulators. However, the closure report concluded that no laws were violated and no criminality was established.
In 2009, the Roys had taken a loan from Vishvapradhan Commercial Private Limited, a company then linked to Reliance Industries that was subsequently acquired by the Adani Group in 2022. This acquisition paved the way for the conglomerate’s takeover of NDTV.
The central agency had alleged that the Vishvapradhan Commercial Private Limited loan was used to foreclose an earlier loan availed by NDTV from ICICI Bank, which resulted in the alleged loss of Rs 48 crore to the bank.
Key findings
The Central Bureau of Investigation said that ICICI Bank had sanctioned loans to several companies with similar credit ratings during the same period and that a reduction of the interest rate on NDTV’s loan, from 19% to 9.65%, was also consistent with the bank’s practices.
“ICICI Bank has reduced rates of interest in respect of 83 loan accounts during 2007-10,” the report noted, according to The Wire.
Additionally, the Reserve Bank of India clarified to the central agency that the loan under the non-disposal undertaking-power of attorney model did not constitute a pledge and was not prohibited.
A non-disposal undertaking-power of attorney is a contract that prevents the sale of shares of a company by its shareholders.
The Securities and Exchange Board of India stated that its rule requiring disclosure of pledged shares to regulators was introduced in 2009, while the NDTV loan was sanctioned in 2008.
An external forensic audit also deemed the transaction to be a routine business deal.
Background
The case was filed in 2017 based on a private complaint by Sanjay Dutt of Quantum Securities. In June of that year, the central agency conducted searches at the Roys’ homes in Delhi and Dehradun.
The Roys were questioned in the matter by the Central Bureau of Investigation in 2022, The Wire reported.
The loan taken in 2009 by Radhika Roy Prannoy Roy Private Limited – an entity that held a 29% share in NDTV – from Vishvapradhan Commercial Private Limited was also part of the central agency’s investigation, The Wire reported.
The terms of the loan agreement were such that Vishvapradhan, as The Caravan reported in 2015, could convert it into 99.9% of the shares in Radhika Roy Prannoy Roy Private Limited “at any time during the tenure of the loan or thereafter without requiring any further act or deed on the part of the lender”.
The complainant had alleged that the Roys pledged their entire shareholding as collateral for this loan, failing to report the pledging to the Securities and Exchange Board of India, the stock exchanges and the Ministry of Information and Broadcasting, PTI reported.
After the searches by the Central Bureau of Investigation in 2017, NDTV had said that the loan from ICICI Bank, which it was accused of defaulting on, had been repaid over seven years ago, PTI reported.
The media network also asserted that the allegation of failing to disclose the pledging of shares to the market regulator was “incorrect and false”.
In August 2022, Adani Enterprises said it was acquiring a 29.18% stake in NDTV by purchasing 100% of the equity shares in Vishvapradhan Commercial Private Limited. This was done through AMG Media Networks Limited, a wholly-owned subsidiary of Adani Enterprises.
This triggered an open offer to buy another 26% of NDTV’s stake, which effectively gave the Gautam Adani-led conglomerate majority control over the news outlet.
Also read: How Adani acquired a firm controlled by an Ambani aide to launch a hostile take-over bid for NDTV
Limited-time offer: Big stories, small price. Keep independent media alive. Become a Scroll member today!
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!