NDTV-ICICI loan chicanery saved Roys

Discussion in 'International Politics' started by S.A.T.A, Dec 5, 2010.

  1. S.A.T.A

    S.A.T.A Senior Member Senior Member

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    NDTV-ICICI loan chicanery saved Roys

    JOYEETA BASU & PRAYAAG AKBAR | New Delhi

    NDTV Limited and associate companies in which Prannoy Roy and Radhika Roy have a majority stake have indulged in financial misdemeanours and malpractices in connivance with ICICI Bank, and raised funds by misdeclaration of the value of shares in NDTV. These shares were held by a company called RRPR Holding Private Limited. The deal took place between July and October 2008 during a "buyback" of shares from the stock market announced by NDTV Limited at the price of Rs 439 per share.

    Share prices were in a period of boom at the time, and the company expected prices to rise even further. This is why it wanted to buy the shares back. Since the company did not have sufficient liquid funds to finance this purchase of shares, it took a loan from India Bulls Financial Services of Rs 363 crores, pledging 90,70,297 NDTV shares. This was in July 2008.

    In August 2008, the stock market collapsed on the back of the subprime crisis in USA; the index crashed from about 22,000 to below 10,000. The price of NDTV shares went down from a high of Rs 394 to around Rs 100.

    The collateral of the India Bulls loan, therefore, depreciated, compelling India Bulls to recall the loan. NDTV did not have the money to do so. They approached ICICI Bank to lend them money. ICICI gave a loan of Rs 375 crores in October 2008 against the collateral of 47,41,721 shares held by RRPR, at an average price of Rs 439, representing a gross value of Rs 208 cr.

    This was the first financial malfeasance, since the worth of the collateral was far less than the amount given. This was further compounded by what can only be described as financial chicanery, since the price of the shares given as collateral was not Rs 439 but was actually Rs 99 in the market, as of 23 October 2008. The gross value of the collateral was only Rs 46.94 crores, or one-eighth of the loan given. ICICI, a publicly traded company in which the government and its institutions have a substantial stake, therefore accepted a lie purveyed by Prannoy Roy and Radhika Roy, the only two shareholders in RRPR. It is also important to note that RRPR did not own a single NDTV share before July 2008, authorised and subscribed capital of a mere Rs 1 lakh.

    Shockingly, just days after the disbursal of the monies, one of the directors of RRPR Holding [there were only two directors, the husband-wife team of Roys], was granted an interest-free loan of Rs 73.91 crores from the funds that had suddenly come into this inert company through the ICICI loan. The ICICI loan was an open violation of the SARFAESI Act of 2002.

    The Ministry of Corporate Affairs, who received the necessary intimations of all transactions, gave implicit acquiescence of the transaction by choosing to remain silent. RBI, which had also received this information, also kept quiet.

    To put this malfeasance in context, last month CBI arrested eight senior managers of LIC and other banks for a loan scam amounting to Rs 2000 crores in multiple transactions. NDTV has been a frequent borrower abroad, and also selling stakes in subsidiaries abroad and repurchasing these shares through various interested parties at prices that have no relationship to actual market values. For instance, NDTV Imagine [now sold] shares representing a face value of Rs 10, were sold at Rs 776. The benefit of such high premium obtained by these shares has not reached the Indian investors in the company. NDTV shares, on the other hand, are slipping even further, and losses rising. Its business overseas is through subsidiaries, which conduct financial dealings through accommodation addresses; one is 90 High Holborn, London.
     
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  3. Ray

    Ray The Chairman Defence Professionals Moderator

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    How come NDTV Profit did not advise them how the market was moving?

    That means that NDTV Profit's predictions are dangerous for the common investor?

    I have no clue about investments and so I escaped NDTV's fate.

    God is kind!:)

    NDTV is going through bad times it appears.

    They are in the red and Barkha Dutt allegedly playing a broker!
     
    Last edited: Dec 5, 2010
  4. maomao

    maomao Veteran Hunter of Maleecha Senior Member

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    LOL hahahhahah I just checked their P/L account of NDTV and they have been in major Loss for a long time, no doubt they and ICICI in connivance with Congress have manipulated shares!!
     
  5. Ray

    Ray The Chairman Defence Professionals Moderator

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    Pronnoy Roy's wife and Brinda Karat of CPM are sisters!
     
  6. sob

    sob Moderator Moderator

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    so now we can understand the slant of all the news brodcast by NDTV. They need to be in the good books of the Congress Govt. to keep their companies afloat
     
  7. johnee

    johnee Elite Member Elite Member

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    It seems most of the powerfuls and power-brokers are related to each other through blood or business. Its like a legal mafia with illegal extensions in Maos, their backers and supporters...etc etc.

    These people have been sucking common people for a long time. Thank god, that India is rising and aam aadmi inspite of all the corruption is able to aim and work for a better future.
     

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