NDTV threatentens Gaurdian

NDTV Worldwide
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Haa haa haa isnt it a joke that the Media moghul who claims to satand for the transparency (the RTI awards) and fight for rights (remember the human interest stories?) has threatened to sue / criminal defamation.

Also look at the Following story on NEWSGRAM which shows the funds misapropriation and tax evasion violation of tax and corporate laws….

NDTV juggles funds, shares abroad, avoids tax

NDTV India group raised funds worth Rs 804.6 cr between April 2008 and September 2009 out of a total of about Rs 982.2 cr through foreign sources, primarily through its subsidiaries in UK and Netherlands.

NDTV Network Plc is registered in the UK, and its address — Seventh Floor, 90 High Holborn, London, WC1V 6XX — is an “accommodation address”. The address also has Olswang Solicitors in the same premises. Olswang Cosec Ltd is Plc’s company secretary and represents many other companies. CoSec stands for company secretary. Companies like Olswang Holdings, Olswang LLP and others operate from the same address. Plc does not have any employee.

But while the names of the directors of the UK subsidiary are available on UK’s Companies House website and statements about its balance sheets, it is difficult to obtain information on the largest shareholder, NDTV BV as it is in Dutch. The only thing known about BV is that it is a subsidiary of NDTV India.

Here is the answer for Gaurdian by NDTV in the most polite but abusive and headstrong reply…

Your fax of 3rd December 2010, is riddled with innuendos and false accusations. While we have answered all your questions, we reserve the rights under civil and criminal law both against your publication and against any individuals in your organisation.

We repeat that your fax is based on false information and is clearly motivated to defame NDTV. The fact that you refuse to meet us and discuss the issues face to face despite repeated requests, is in itself an indication of this attitude. We still ask that you meet us and discuss the entire matter and hold onto any publication till then.

If despite our response, you decide to carry a story on this, we would insist that our entire response be carried with the same prominence, headline and abutting the article. Further, we would ask that you share a copy of the full article with us before it is published so that we can counter any allegations and innuendos that are not part of your questionnaire.

Its amazing at how opaque they are and still threaten people who want transparency! I believe this happens as one grows and gains strength without the true principles. The article from Gaurdian is here for more elaborate information.

Here are the Gaurdians Q’s and NDTVs A’s

1. At a time when NDTV is publicising NDTV Networks PLC as a subsidiary of NDTV, why isn’t it attaching the accounts of this subsidiary or of its other foreign subsidiaries with its accounts?

1. NDTV Limited has been exempted by the Ministry of Corporate Affairs from attaching the accounts of its subsidiaries with its balance sheet. A statement of accounts of its subsidiaries is, however, attached with the annual report. More importantly, NDTV Limited as a matter of policy (stated very clearly in its annual reports) allows any investor who would like to see detailed financial statements of the subsidiaries to either demand them from NDTV or to inspect them at its registered office. Lastly, the detailed financial statements of the overseas subsidiaries are also available as per the respective laws of their jurisdictions. For example, the financial statements of NDTV Networks plc are easily available on the website of Company House, UK.

2. Specifically, why were the accounts of NDTV’s subsidiary companies not attached with NDTV’s balance sheet/annual report of 2006-07?

2. The accounts of NDTV’s subsidiaries were not attached to the 2006-2007 balance sheet/annual report of NDTV Limited because NDTV Limited was not required to do so, on account of the aforesaid exemption.

3. The company applied to the Ministry of Corporate Affairs on 24 May 2007 for exemption in relation to nine subsidiaries, including overseas subsidiaries. The balance sheet was signed on 22 May 2007. So exemption was not available to NDTV on the date of signing the annual report/balance sheet on 22 May 2007. Isn’t this a punishable offence?

3. The government has exempted NDTV from attaching the financial statements of its subsidiaries with its annual report for each of the financial years since 2006-2007. The government grants this exemption for specific years and the date when the balance sheet is signed by the directors is totally irrelevant. What is relevant is the date on which the annual report is sent to the shareholders. In NDTV’s case, the annual report was sent to the shareholders only after receipt of the central government’s approval. The irrelevance of the date on which the balance sheet is signed is further demonstrated by the fact that the government granted this exemption for the financial year 2006-2007 even though the application was made after the signing of the balance sheet/ annual report. This is exactly as required by law.

In any event, we do not understand why a routine exemption, which all large companies generally seek and receive, is considered noteworthy by you. Please consider the following

The accounts of NDTV Limited are compiled and disclosed on a consolidated basis. Therefore all relevant information relating to its subsidiaries is anyway contained in NDTV Limited’s own financial statements.

This exemption is sought and received by all large corporate groups (including Infosys, Bharti Airtel, Tata Steel, Aditya Birla Nuvo, TVS Motors Co Ltd and Tata Motors) simply because attaching the balance sheet, P&L, Directors Report and other statements for each subsidiary makes the annual report of the parent company extremely unwieldy.

4. If the foreign companies are admittedly subsidiaries of NDTV why are the names of the shareholders, directors and the shares held by each and the remuneration paid to directors/employees not being disclosed to regulatory authorities in India?

4. It is absurd to suggest that the names of NDTV Limited’s subsidiaries or other information have been suppressed. Their names, NDTV’s shareholding (direct or indirect) in them, names of directors who have received any remuneration from any subsidiary and the remuneration paid to NDTV’s directors by any subsidiary are all disclosed in NDTV’s annual reports to the fullest extent required by law.

5. Specifically, why hasn’t NDTV made public any information about NDTV BV, about its directors, the source of its finances, etc? Or about the sources of the money raised by NDTV Network Plc?

5. All information about NDTV BV and NDTV Networks plc, which NDTV is required to disclose under Indian law, has been duly disclosed. Its relationship to NDTV, sources of funds, NDTV’s shareholding in it and its key financials are all disclosed in the annual reports of NDTV.

6. According to the annual report of the NDTV group for 2008-09, NDTV Network Plc invested over Rs 400 cr in its subsidiaries: Rs 383.43 cr in NDTV Imagine, Rs 14.64 cr in NDTV Convergence and Rs 29 cr in NDTV Lifestyle. Why is nothing known about how this money was raised?

6. You have asked us why nothing is known about the manner in which funds have been raised for infusion into its subsidiaries. This information is so widely known and so easily accessible that the only reason why it is not known to you can be that your researchers have not done their jobs well.

The following were the ways in which funds were raised for the non-news businesses carried out by these subsidiaries. Each of the following were widely publicised, were duly disclosed to the stock exchanges and have been explained in meticulous detail in the annual reports of NDTV.

In 2007, USD 20 million were raised by issuing preference shares to private equity investors.

In 2007, USD 100 million were raised by the issuance of convertible bonds.

In 2008, USD 150 million were raised by issuing shares to NBCU group companies.

These funds were infused into companies like NDTV Imagine, NDTV Lifestyle and NDTV Convergence, among others, from time to time, as required under their approved business plans. Prior permission of all relevant regulatory authorities including the FIPB, Ministry of I and B, RBI and others as required, was obtained before such funding.

7. Are stakes being sold and repurchased to boost the share price of NDTV? Please refer to the buyback in October 2009 of the 26% shares held by NBCU in NDTV Plc.

7. Your seventh question, and the manner in which it has been framed, raises serious doubts about the integrity of your intentions. Typically, we would not have dignified such questions (which are really accusations and not genuine inquiries) with a response. However, we are inclined to extend you the benefit of doubt.

Firstly, there was never any stake sale in the NBCU transaction. In May 2008, NBCU subscribed to fresh shares of an NDTV subsidiary. These shares were purchased by a subsidiary of NDTV. Therefore, there was never any instance of sale and repurchase. Both these transactions were consummated at an arm’s length and were fully disclosed. There is no question of having done anything to “boost” the value of NDTV’s shares although shareholder interests are always protected within the framework of the law.

8. What is the tax treatment meted out to repeated acquisition and alienation of assets of foreign subsidiaries? Do repeated foreign transactions have RBI and regulatory approvals?

8. NDTV’s overseas subsidiaries are complying with all tax compliance requirements. Whenever any approval was required from any regulatory authority it has been sought and received. In fact, the overseas investments were themselves made only after obtaining an FIPB approval.

9. Shouldn’t NDTV be questioned by the authorities for the amount of tax evaded on offshore transactions and the service tax evaded on consultancy activities of companies listed abroad? Aren’t these companies a conduit for funds-flow to the Indian company?

9. We are shocked at the suggestion that NDTV has evaded tax. As mentioned previously, NDTV’s overseas subsidiaries are complying with all tax compliance requirements. All applicable laws have been duly complied. Therefore, it is preposterous to say that the overseas operations are a “conduit for funds flow into India.”

We place on record that NDTV will vigorously prosecute its rights under civil and criminal law – both against your publication and against any individuals in your organization who may be involved with any act of defamation against NDTV. Specifically, we intend to file cases of criminal defamation and pursue these to their conclusion against any individual or organization that makes insinuations of wrong-doing without stating concrete facts clearly and accurately.

Regards,

K V L Narayan Rao,

Group CEO & Executive Director, NDTV.

One thought on “NDTV threatentens Gaurdian

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