Setback for NDTV

In a major setback for NDTV and its promoters, the Income Tax Appellate Tribunal (ITAT) has issued an order confirming the assertions of the I-T department regarding financial improprieties at the media group.

The order by the ITAT concerns the accounting year 2009-10 and states that 'the NDTV Group had laundered its own black money of Rs. 642.54 crore using foreign paper companies.' It adds that NDTV co-founder and executive co-chairperson 'Dr. Prannoy Roy was personally involved in tax evasion and money laundering' and that 'in 2009, the Ministry of Corporate Affairs was hand in glove with him in his conscious efforts to hide financial information of the foreign shell companies floated and used for money laundering.'

As proof, the ITAT offered that Dr. Roy had informed shareholders and regulatory authorities that the ministry had granted exemptions to NDTV for not making disclosures of financials of its foreign shell companies more than a week before he made the application seeking a said exemption. 

The ITAT order concludes: "In a nutshell, Dr. Prannoy Roy was sure that Ministry of Corporate Affairs will grant such an exceptional exemption to NDTV even before approaching to the ministry."

The order also names global professional services firm PricewaterhouseCoopers (PWC), taking note of its role in the 'scheme of tax evasion of Rs. 642.54 crore detected by the Income Tax Department and confirmed by it.[ITAT]' It adds: "It is pertinent to mention here that Pwc was involved in several other financial scandals like Satyam Computer."

In the order, the ITAT writes:

• In the year 2009, Ministry of Corporate Affairs was hand in gloves with the Dr.Prannoy Roy in his conscious efforts to hide financial information of the foreign shell companies floated and used for money laundering of Rs. 642.54 crores.
• The ITAT has confirmed the findings of the Income Tax Department that NDTV Group has laundered its own black money of Rs. 642.54 crores using foreign paper companies.
• The ITAT has also held that Dr. Prannoy Roy was personally involved in the tax evasion and money laundering case of Rs. 642.54 crores.
• It pertinent to mention here that as per the investigation of the Income Tax Department, the NDTV and its promoters have laundered black money of Rs. 1,100 crore during A.Y. 2007-08 to 2009-10 out of which finding of black money of Rs. 642.54 crores and its laundering during A.Y. 2009-10 has been confirmed by the ITAT in case of NDTV. 

At the time of publishing, NDTV hasn't responded to the ITAT's order.

NOTE: Republic TV and NDTV compete in certain markets