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NDTV raids: Why the CBI FIR is more against ICICI bank than Prannoy Roy

Neeraj Thakur | Updated on: 6 June 2017, 20:54 IST
(Arya Sharma/Catch News)

The Central Bureau of Investigation (CBI) on 5 June raided the homes of Prannoy and Radhika Roy, promoters of news channel NDTV.

While some view the raids a part of political vendetta against a news channel that has been critical of government policies, others see merit in the case that implicates the high profile promoters on charges of siphoning off cash using the money laundering route.

It is also alleged that the promoters of NDTV have caused a loss of Rs 48 crore to ICICI bank.

What is the reality?

The FIR filed by the CBI to initiate raids at Roy's homes, frames Roy in a case of “criminal conspiracy, cheating and criminal misconduct”. The FIR is based upon a complaint filed by Sanjay Dutt, who once served as a consultant to the TV channel, and also held a minority stake in the company.

A thorough reading of the FIR suggests that the allegations made by Dutt put ICICI bank more in the dock than the promoters of the NDTV.

In fact, the case against Roy comes down to not servicing the full amount of the loan taken the ICICI bank. In every other allegation made by the complainant, it is the bank's management that appears to be the real culprit.


1) The FIR quotes section 19 (2) of the Banking Regulation Act by the ICICI bank for extending a loan of Rs 375 crore to NDTV against a collateral of the entire shareholding of the promoters in NDTV, which amounted to 3,96,14,759 equity shares. The Banking Regulation Act does not allow a banking company (ICICI) to hold shares in any company” whether as pledge, mortgage or absolute owner of an amount exceeding 30% of the paid up share capital or reserves, whichever is less.

In this scenario, if the allegation is correct, the charge that Roy faces as a promoter of NDTV is of not informing the SEBI of pledging its shares for a loan amount from a bank. But what about ICICI bank - it lent out money violating a law that regulated banking sector. 

2) The second charge is of violating section 19 (2) of RBI Act by ICICI that requires for extending a loan amount to help promoters of a company to acquire or retain controlling stake in the company. As mentioned in the FIR, Roy used the loan amount taken from ICICI bank to pay back money taken from India Bulls Ltd.


3) The third allegation against NDTV promoters is that they entered an agreement with ICICI bank on 6 August 2009 to pay back 99% of the loan equivalent to Rs 350 crore. The complainant alleges that the bank could have asked for the whole amount, which would have meant an additional Rs 48 crore calculated on the basis of 19% interest settled at the time of signing the loan agreement.


This is the most crucial part of the allegations, which again questions the management of ICICI bank, which took a decision to take a hair cut on the loan amount extended to NDTV promoters.

A double-edged sword

If the CBI is acting on the allegation that the ICICI management should not have come to a settlement on loan repayment at a loss of Rs 48 crore, the same logic would soon be haunting the whole banking sector as there are more than Rs 10 lakh crore worth of loans extended by pubic sector banks have not been serviced by the corporate sector.

Sooner or later, the banks will have to go for a one-time settlement with companies. A decision against ICICI bank on this account will only ensure that the heads of public sector banks would shy from taking haircut on their bad loans, which will only aggravate the problem of non-performing assets in the Indian banking sector which are around 9% of the total loans extended.

It is no secret that the Modi government is not on good terms with NDTV due to the channel's critical coverage of government policies.

However, it would be really foolish on the part of the government to have its revenge against a media house by using double-edged swords that bleed not just the assaulted, but also the assaulter.

First published: 6 June 2017, 20:54 IST
Neeraj Thakur @neerajthakur2

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