NDTV--Targeted by the BJP?

NDTV Tax Story - Part III. Within this media house they believe that there is a BJP link connecting the politicians and journalists who target them.

Given the allegations of financial misdemeanour against New Delhi Television Limited, the question arises as to whether the media group is being persecuted. Highly-placed sources in NDTV certainly believe they are, that too by individuals close to the Sangh Parivar.  

On April 8, 2013, during the "Think India Dialogue" organized by the Network18 group -- headed by Raghav Behl and financially supported by Mukesh Ambani's group and which is NDTV's rival -- Gujarat Chief Minister and the BJP's prime ministerial candidate Narendra Modi made a few sarcastic comments about the Planning Commission's financial support to tiger conservation projects, alluding to NDTV. This is a verbatim account of what Modi said during his public conversation with Behl:  

"Planning Commission mein charcha hui, …Tiger ke liye 200 crore rupaiye diye, bharat sarkar ne diye.  Shayad woh NDTV usise chalta hai. Mujhe pata nahin..." (There was a discussion in the Planning Commission on tiger conservation. The government has allotted Rs 200 crore for this. I don't know if NDTV also runs on this money.)

Modi  then went on to wonder if the Planning Commission thought tigers were secular and lions (which Gujarat has in sizeable numbers) were communal, to general mirth among those assembled in the audience. Sources in NDTV told us that its 'Save the Tiger' campaign was sponsored entirely by private companies and no money was received from any government agency.  

Now comes the December 2013 letter from BJP MP Ram Jethmalani to Finance Minister P. Chidambaram, accusing him of having stalled the investigation into the alleged case of money laundering by NDTV. The contents of this letter and its annexures were carried almost in full by the website of Manushi, a trust run by Madhu Kishwar who is a supporter of Modi.  

Kishwar and Manushi have been served a legal notice by the law firm, Luthra and Luthra, NDTV’s lawyers, asking her to remove the article from her website. Kishwar has not done so and has replied to the legal notice on her trust’s website by saying Manushi will not be silenced by a politically patronized media organisation like NDTV.  

Following Kishwar, journalist Virendra Kapoor too aired the allegations against NDTV in the Afternoon Despatch and Courier. Kishwar and Kapoor are perceived as being less than critical towards the BJP.

Interestingly, while Jethmalani seems to have not followed up his letter to Chidambaram, the person who is the Rashtriya Swyamsevak Sangh's man for all financial matters, Chennai-based journalist and accountant Swaminathan Gurumurthy and NDTV's Prannoy Roy have exchanged e-mail messages on the allegations raised by IRS officer S.K. Srivastava.

Gurumurthy rejected NDTV’s explanations by questioning the authenticity of the documents provided (ostensibly on the ground that some of the documents were not attested by Indian envoys stationed abroad) and that other documents were generated in 2012 and 2013 when the investments were made in 2007 and 2008.  

Sources in NDTV told us that they were under no obligation to provided Gurumurthy "authenticated" documents in the way he wanted and reiterated their view that the allegations levelled against the group are without basis and that all its financial transactions are genuine and above board.  

The entire affair now seems to be acquiring farcical dimensions. When we asked former Union Law Minister Ram Jethmalani how he intended to take his allegations forward since his letter to Chidambaram had been widely publicized, he said Roy and his colleague had met him and given him a bunch of papers that apparently indicated that there were no suspect transactions. He said he had not yet been able to read the papers given to him by NDTV's representatives.  

Jethmalani said that his son (Mahesh Jethmalani) had told him that Gurumurthy was very upset with him because he had met Roy and his colleagues. We asked him what he would do if he was convinced that the allegations against Chidambaram and NDTV were without basis, he said he would not hesitate in tendering a public apology to all concerned.  

One of the first publications that levelled allegations of financial impropriety against NDTV was the Sunday Guardian, a publication which was earlier owned by a company controlled by its managing director and the weekly's editor M.J. Akbar,  and Ram Jethmalani.  

In December 2010, the publication came out with a story co-authored by Akbar's son Prayaag Akbar titled: "NDTV-ICICI Bank loan chicanery saved Roys". The story alleged, among other things, that NDTV obtained a loan of Rs 375 crore from ICICI Bank in October 2008 by pledging over 47 lakh shares of  NDTV held by RRPR Holdings, an associate company, at a rate of Rs 439 per share when, in fact, the shares were worth Rs 99 each.  

Although the story did not quote anybody from ICICI Bank, it raised questions as to how this transaction had gone through. This particular article was not carried in the facsimile edition of the Sunday Guardian published out of London. It was subsequently removed from the  website of the publication after NDTV moved the Delhi High Court on December 2011 claiming that Sunday Guardian had sought to defame the company and its promoters, including Prannoy Roy and Radhika Roy, and obtained an order of restraint from the court against the continued dissemination of the allegations against NDTV.  

However, before this court order was obtained, a copy of this story had been sent to the chairman of Parliament’s Standing Committtee  on Finance, headed by BJP MP and former Finance Minister Yashwant Sinha. The committee then sent a notice to the income tax department to look into the case which thereafter decided to investigate the finances of companies in the NDTV group.  

Incidentally, Narendra Modi was an important guest at the wedding reception of Prayaag Akbar.  

Besides the Sunday Guardian, Moneylife, a magazine and website run by journalist Sucheta Dalal,  has taken a critical look at NDTV, pointing to the Congress  connection of one of its investors. In August 2011, in an article titled "Glamour Stocks turn Ugly", Moneylife wrote:  

"Look at the shareholder returns of some of these glamour stocks over the past five years. NDTV got listed in 2004 and is trading below its listed price after seven years. It has given a negative return of 19% compounded in the past five years….(but) every few months the financially beleaguered NDTV manages to get 'strategic' investors with deep pockets and top-flight private equity investors  to step in and pick up big chunks of the equity at fancy valuations…..The latest was DE Shaw which provided an exit to Goldman Sachs in 2011 by acquiring a 14.2% stake. After this, NDTV acquired a significant investor—Abhey Oswal, who owns nearly 15% of its equity but seems to have no presence on NDTV’s board of directors. Mr Oswal happens to be the father-in-law of Naveen Jindal, an industrialist and Congress Member of Parliament."  

In June 2013, Moneylife reported allegations levelled by Sanjay Dutt, who was once an adviser to NDTV and who now runs Quantum Securities Pvt Ltd, questioning the same transactions that the Sunday Guardian  had  written about in December 2010   

Indian Revenue Service officer S.K. Srivastava, who was the first to level allegations against the Finance Minister and NDTV's promoters and against whom an arrest warrant has been issued, has claimed that after he began investigating the media group's financial transactions, he found that the group had been involved in questionable deals for over a decade.  

This is an uncorrected verbatim excerpt from the annexure to the letter sent by Jethmalani to Chidambaram: "..Srivastava then studied the history of NDTV's birth and evolution, how it was languishing for want of funds till 2004 and how huge funds rushed in thereafter. NDTV started off as a programmer of Doordarshan both on outright payment basis and revenue sharing basis. It manipulated to get high yield for paid programme and low yield for shared programme, which led to investigation against NDTV by the CBI in 1999 and that led to a case registered against Shri Prannoy and NDTV under the Prevention of Corruption of Act for Rs 4 crores fraud on the DD. This caused loss of government patronage for NDTV during 1999-2004. By 2004, the NDTV had virtually become broke, with lenders recalling loans. But as soon as government changed and you became Finance Minister, the fortunes of NDTV underwent a dramatic change."  

Following the presentation of a report on this subject by Parliament's Public Accounts  Committee (PAC) headed by BJP MP Murli Manohar Joshi, in January 1998, a First Information Report (FIR) was filed at the New Delhi office of the Central  Bureau of Investigation against Rathikant Basu, former Director General of Doordarshan, Prannoy Roy, the then managing director of New Delhi Television Limited, the company NDTV Limited itself, besides five other officials who were holding senior positions in Doordarshan at that time, Ashok H. Mansukhani, Harish Awasthi, Shiv Sharma, Shashi Kant Kapoor and S. Krishnan.  

The FIR alleged that these people had entered into a criminal conspiracy to cheat the exchequer invoking various provisions of the Prevention of Corruption  Act and the Indian Penal Code. 

On July 3, 2013,  the CBI special court accepted the closure report filed by the premier investigating agency. A reading of the order of Special Judge L. K. Garg may make some of the people familiar with the episode smile with amusement. That is because even as the order painstakingly recounts all the incidents of how Doordarshan paid NDTV for its commissioned or sponsored news programmes, or often did not, it could not find a single instance of criminality.  

In fact, Doordarshan's functioning at that time appears rather arbitrary, although its then Director General Rathikant Basu introduced new initiatives that sought to make Doordarshan a "dynamic" organisation. Even if one argues that the CBI did half-hearted job of investigating the allegations of corruption against those named in the FIR, the judge has remarked that a more objective comparison of payments made to different producers by Doordarshan during that period would have helped the court arrive at a conclusive finding.  

In other words, the judge came round to the view that even if the functioning of the country's public broadcaster was no different from a village marketplace, a criminal case had not been proved by the CBI.  

What were the allegations? The officials of DD, including Basu, allegedly connived with Prannoy Roy and NDTV to favour NDTV  resulting in a financial loss to Doordarshan. One such instance related to the programme "The World This Week" (TWTW) which ran first as a commissioned programme for which NDTV was being paid Rs two lakh per episode.  

In February 1009, TWTW was converted into a sponsored programme for which the producer had to pay Doordarshan a telecast fee. Commissioned programmes, on the other hand, were funded by the public broadcaster.  

The CBI's FIR alleged that in April 1990, Doordarshan officials decided to place TWTW  in the 'A special' category with a view to confer a favour on NDTV. "The telecast fee of 'A' category was Rs 80,000 and for 'A special' category it was Rs 1,70,000. The free  commercial time (FCT) in 'A' category was 120 seconds whereas  in 'A special category' it was  90 seconds," the FIR states.  

This decision allegedly benefitted NDTV to the tune of Rs 3.30 lakh per episode while Doordarshan had to bear a loss of Rs. 3.53 crore. The FIR claimed that the loss to Doordarshan may have been as high as Rs. 5 crore. The CBI's FIR added that the report of Parliament's PAC on the issue of lower categorisation was also "verified", the CBI's FIR added.  

The July 3, 2013, order of the judge of the CBI special court held that the "desire" of Doordarshan "to earn more revenue resulting from popularity (of the programme) is understandable. It could have done so only by re-categorising  the programme because it is only then it could charge more for the spot ads...' The judge concluded that "there may have been a deviation from guidelines, but they were in favour of DD and not against it."  

On the overall working of Doordarshan, Special Judge Garg stated that Doordarshan should have first decided what programmes it wanted, instead of having producers coming to it and the broadcaster thereafter taking decisions on these proposals. He said: "It would have made a great deal of sense if during the investigation there had been material collected to show if in the case of other private producers  the guidelines were being followed…and if they were breached only to favour NDTV…."  

These and many other observations in the judge's order indicate that the CBI could not convince him that the investigating agency had been able to find evidence that indicated criminality.  

The order of the Special Judge came fifteen years after the FIR had been filed by the CBI.  

Sources in NDTV who spoke to us on condition of anonymity say that more than a decade after the PAC report was tabled in Parliament and the FIR was lodged by the CBI against the promoters of the group, their position has been vindicated. They feel the CBI's investigations against NDTV was motivated.  

There is an interesting sidelight to this case. A person who describes himself as a Right to Information (RTI) activist, Kashmir Singh, has been seeking answers to various questions relating to this case. A source close to Singh told us that he intends challenging the order of the CBI court in a higher court of law. He claimed the CBI had not thoroughly investigated the allegations against NDTV and the former officials of Doordarshan (at least one of whom is no longer alive). The source added that Basu should have been questioned about the work he did after he left government service.  

When contacted, the former DG of Doordarshan Rathikant Basu told one of the writers of this article that he had joined Star TV after he left Doordarshan. He pointed out: "In fact, Star TV commissioned NDTV to give it news programmes."  

Basu then asked: "So where is the quid pro quo that is being suggested?"  

Has this chapter finally closed? Time alone will provide an answer. Meanwhile, the top management of NDTV awaits the order of the assessing officer of the Income Tax Department on its accounts for 2008-09 and 2009-10 based on the December 31, 2013 findings of the department's Dispute Resolution Panel and will thereafter decide whether or not it should appeal before the Income Tax Appellate Tribunal. 


Related links:

Part I: NDTV -- Sham transactions or legit deals?
Part II: The mystery Rs 1 crore holiday

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