NDTV says it received show notice from ED on FEMA violations; ED charges amount involved is Rs2030 crore
NDTV told BSE that Prannoy and Radhika Roy, KVL Narayan Rao and NDTV Studios have received show cause notice from ED on alleged contraversions of provisions of FEMA 
 
New Delhi Television Ltd (NDTV) said it has received a show cause notice from the Enforcement Directorate (ED) regarding alleged contraversions of provisions of Foreign Exchange Management Act, 1999 (FEMA).
 
In a regulatory filing, NDTV said, "...the company along with Dr Prannoy Roy, Executive Co-Chairperson, Mrs Radhika Roy, Executive Co-chairperson, Mr KVL Narayan Rao, Executive Vice Chairperson and NDTV Studios Ltd (erstwhile subsidiary of the Company since merged with the Company) have on 19 November 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."
 
According to the ED, “investigation under FEMA in the matter of NDTV Ltd. has revealed financial transactions in FEMA contraventions by NDTV Ltd. by availing the facilities provided by RBI relating to Overseas Direct Investment (ODI) and Foreign Direct Investment (FDI) as under   
 
1. NDTV Ltd. through its step down subsidiary in UK, NDTV Networks Plc. (NNPLC) was permitted by FIPB to raise overseas funds through public offerings of equity shares and through AIM listing at London Stock Exchange and remit those funds in its group companies. But NNPLC raised funds by way of overseas loan , bonds and optionally convertible preference shares.  NDTV Ltd. has violated Regulation 5 (1) of FEM (Transfer or Issue of Security to Persons resident outside India) Regulations, 2000 issued under Section 6 (3) (b) of FEMA by not complying with the terms and conditions of FIPB approval.
 
2. NDTV Ltd. raised funds outside India to the tune of USD 170 Million through NNPLC and brought USD 163.78 Million (Rs. 725.56 crore approximately) 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  is not a genuine and bonafide business activity and is 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. 
 
3. NDTV Ltd. in its group companies in India further received USD 83,909,977 and USD 21972 from its overseas subsidiaries namely NDTV Mauritius Media and NDTV Worldwide Mauritius Ltd. under the automatic route of RBI in the guise of FDI. RBI has pointed out that bringing funds in its group companies by NDTV Ltd. from its overseas subsidiaries is not a genuine and bonafide business activity and is a contravention of Regulation 6 (2)(ii) of the FEM (Transfer or Issue of any Foreign Security) Regulations, 2004.  
 
Thus, NDTV Ltd. received an amount of Rs. 1113.31 crore approximately in total in contravention of FEMA provisions.
 
4. NDTV Ltd. has issued Corporate Guarantees (CG) in favour of NNPLC to the tune of USD 84 Million relating to the arrangement of funds of USD 170 Million and loans taken by NNPLC which were not reported to RBI. RBI has pointed out that not seeking RBI approval and not reporting to RBI to issue a Corporate Guarantee is a contravention of Regulation 6(2)(vi) and Regulation 6(4) of the FEM (Transfer or Issue of any Foreign Security) Regulations, 2004.
 
5. NDTV Studios Ltd. (another group company of NDTV Ltd.) has deposited a sum of Rs. 200 crore with Bank of Baroda, Corporate Financial Branch, Parliament Street, New Delhi relating to USD 70 Million Loan by NNPLC. NDTV Studios Ltd. has contravened the provisions of Section 3 (d) of FEMA. 
 
6. NDTV Ltd. bought back the transferred shares of its group companies namely NDTV Labs Limited, NDTV Imagine Limited, NDTV Convergence Limited, NDTV Lifestyle Limited and NGEN Media Services Ltd. to the tune of Rs. 296.74 crore from NNPLC to its group companies namely NDTV Lifestyle Holdings Limited and NDTV Networks Limited.  RBI has pointed out that such transactions are in contravention of Regulation 6(2) (ii) of the FEM (Transfer or Issue of any Foreign Security) Regulations, 2004. Thus NDTV Ltd. has contravened this Regulation read with Regulation 10B of the FEM (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, for the amount of Rs. 296.74 crore.
 
7. Thus in the Show Cause Notice issued, NDTV Ltd. has contravened the provisions of the above said provisions of  FEMA and Regulations issued thereunder, in which the amount involved is Rs. 2030.05 crore approx.
 
Further investigation under FEMA is being carried out.”
 
NDTV maintained in the filing that it “has been advised that the allegations of the contraventions of provisions of FEMA in the show cause notice are not legally tenable and the Company will reply to the same within due course of time.”
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Indian agrochemicals industry to be worth $7.5 bn: Report
India's agrochemicals sector business is estimated to touch $7.5 billion by 2018-19 with 60 percent of the value coming from exports, said a report released on Wednesday.
 
"The Indian crop protection industry is estimated at $4.25 billion in financial year 2014 and is expected to grow at a compound annual growth rate of 12 percent to reach $7.5 billion by FY19," the report 'Ushering in the 2nd Green Revolution: Role of Crop Protection Chemicals' said.
 
Releasing the report -- prepared jointly by industry chamber FICCI and Tata Strategic Management Group, Hukumdev Narayan Yadav, chairman of the parliamentary standing committee on agriculture, recommended a balanced approach on using agrochemicals and due care of the environment.
 
"Training farmers is also essential. Farmers, users of agro-chemicals, at present are not adequately informed about its use and impact. Many a time, farmers without knowledge apply inappropriate amount of agrochemicals resulting in crop failure," Yadav said.
 
The report said use of original crop protection chemicals could increase crop productivity by 25-50 percent, by mitigating crop loss due to pest attacks.
 
"It is estimated that almost 25 percent of world's agricultural production is lost due to post-harvest pest attacks," Federation of Indian Chambers of Commerce and Industry said in a statement here.
 
The report said it was critical for both the government and manufacturers of crop protection chemicals to work closely with farmers to educate them on the judicious use of pesticides and new research and development.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Cabinet nod to disinvest 10 percent stake in Coal India
The union cabinet on Wednesday approved a further divestment of 10 percent government stake in Coal India Ltd. (CIL).
 
"The disinvestment of 10 percent stake in Coal India Ltd. was one of the major cabinet decisions today (Wednesday)," Coal and Power Minister Piyush Goyal told reporters here after the meeting.
 
"The terms and time of the divestment will be decided by the finance ministry and the department of disinvestment," he added.
 
The government hopes to raise around Rs.23,000 crore to Rs.24,000 crore through this stake sale.
 
"The government of India intends to disinvest 10 percent paid-up equity capital (63,16,36,440 shares with a face value of Rs.10 each) of CIL out of its shareholding of 78.65 percent through the offer for sale of shares by the promoters through stock exchanges method as per the Securities and Exchange Board of India rules and regulations," a notice from the department of disinvestment said earlier this year.
 
The Centre has sought bids from merchant banks and selling brokers to take the process forward. It will select five such banks or brokers to manage the issue.
 
The government is also considering allotment of shares to eligible and willing employees of CIL at a discount of up to five percent to the issue, up to a maximum of five percent of the size of the offer for sale.
 
As per the proposal from the disinvestment department, the authorised capital of CIL stands at Rs.8,904.18 crore, which comprises of a Rs.904.18 crore non-cumulative 10 percent redeemable preference shares and Rs.8,000 crore equity shares. The subscribed equity capital as of March 31, 2014, stands at Rs.6,316.36 crore.
 
In January-end, the government sold a 10 percent stake in CIL, which fetched Rs.22,557 crore.
 
A majority of CIL workers went on a one-day general strike in early September to protest the Centre's disinvestment move in the company.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Rajendra mandhania

3 years ago

This piecemeal disinvestment reminds of decadent kings,zamindars of British and post independence era when they sold family silver to meet daily expenses or to indulge.

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