ED issues show cause notice to NDTV under FEMA on charge of violating forex law amounting to around Rs 4,000 crore

New Delhi: The Enforcement Directorate (ED) has issued a show cause notice to private television news channel NDTV for alleged violations of the forex law amounting to over Rs 4,000 crore, the central probe agency said Thursday. “The investigation showed FEMA 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 ED said in a statement. [caption id=“attachment_5408111” align=“alignleft” width=“380”] Representational image. Official website[/caption] The show cause notice, issued under the Foreign Exchange Management Act (FEMA), was issued to the founders and executive co-chairpersons of the group — Prannoy Roy and Radhika Roy — and journalist Vikram Chandra and a few others. The companies that are alleged to have contravened the FEMA are MS NDTV Lifestyle Holdings Ltd (now MS Lifestyle and Media Holdings Ltd), MS South Asia Creative Assets Ltd, MS Astro Overseas Ltd and MS NDTV Imagine Ltd (now MS Turner General Entertainment Networks India Private Limited). The ED said the offences identified in respect of the first alleged contravention in the receipt of FDI pertains to “substantive contraventions of Rs 319 crore by NDTV Ltd through contravention of press note 1 of 2005 and downstream investment of Rs 138 crore without FIPB approval. “The remaining contraventions relate to delays under FEMA in respect of allotment of shares within the permissible time limit of 180 days and delays in filing nomination with RBI and reporting requirements,” the agency said. As part of the second violation that has been show caused, the ED said “overseas investment made by NDTV and offences of Rs 582 crore relate to the 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.” The total contravention identified under the latest notice is Rs 4,369 crore. The agency said it is further probing an instance of FDI received by the media group worth Rs 725 crore, which only the cabinet committee on economic affairs (CCEA) was competent to clear (cases of FDI in excess of Rs 600 crore). “But, no CCEA approval was taken (by NDTV),” the ED alleged. “FDI was projected as below Rs 600 crore as part of larger conspiracy. While applying for FIPB approval NDTV projected FDI as varying between USD 130-160 million. Documents of FIPB section also projected FDI differently as Rs 585 crore (USD 130 million at the rate of Rs 45 per dollar). “Further, investigation on this aspect is continuing,” the agency said. It added that there are additional “offences” under probe to the tune of Rs 13,78,68,77,738 by the group in respect of delays in reporting and filing information with RBI such as FIRC, FCGPR, FCTRS among others and delays in allotment of shares.