The Enforcement Directorate (ED) on Friday served a show-cause notice to broadcaster NDTV for alleged violations of forex norms to the tune of Rs 2,030 crore. The notice was issued after the agency found that NDTV’s financial transactions were in contravention of FEMA provisions.
Investigation revealed that the NDTV Ltd. through its step down subsidiary in UK, NDTV Networks Plc. (NNPLC) was permitted by Foreign Investment Promotion Board (FIPB) to raise overseas funds through public offerings of equity shares, however, company raised the funds by way of overseas loan, bonds and optionally convertible preference shares.
ED sources said that the NDTV raised funds outside India to the tune of $ 170 Million through NNPLC and brought $ 163.78 Million (Rs 725.56 cr) in its group companies in India during the period March, 2007 to October, 2010.
“RBI has pointed out that bringing funds in its group companies by NDTV Ltd. from NNPLC was not a genuine and bonafide business activity and was a contravention of Regulation 6(2)(ii) of the FEM (Transfer or Issue of any Foreign Security) Regulations, 2004 issued under Section 6(3)(a) of FEMA,” sources further added.
Talking on the other violations on the part of private broadcaster, an ED official said that the NDTV Ltd. in its group companies in India further received $ 83,909,977 and $ 21972 from its overseas subsidiaries namely NDTV Mauritius Media and NDTV Worldwide Mauritius Ltd. in the guise of FDI. RBI has pointed out that bringing funds in its group companies by NDTV Ltd from its overseas subsidiaries was not a genuine transaction and was is a contravention of Regulation 6 (2)(ii) of the FEM (Transfer or Issue of any Foreign Security) Regulations, 2004, ED statement said.