New Delhi: There was “no collusion or criminal conspiracy or abuse of position” by any public servant or officer of ICICI Bank in sanctioning a loan of Rs 375 crore and reducing interest rate on it to RRPR Holdings Private Limited, the CBI has conceded in its closure report after probing allegations of criminal conspiracy and loan fraud against the company’s former directors Prannoy Roy and Radhika Roy.
RRPR Holdings is the firm that was controlling the news channel NDTV, founded by the Roys, until its acquisition by businessman Gautam Adani in 2022.
The probe agency has also stated that the sanctioning of the loan to RRPR Holdings by ICICI Bank was a “normal business transaction” and not an “isolated” case, and even the reduced rate of interest offered to RRPR Holdings at 9.65 percent was “higher than the average cost of funds”.
The CBI filed the closure report, which ThePrint has seen, on 1 October this year before a special court in New Delhi, after a seven-year investigation.
The CBI had in June 2017 booked the Roys, RRPR Holdings, NDTV India and officials of ICICI Bank on charges of causing the bank a wilful loss of Rs 48 crore by virtue of reduced interest rate from 19 percent to 9.65 percent on the loan, and for not disclosing facts such as pledging their shareholding in NDTV as loan collateral to the market watchdog Securities and Exchange Board of India.
The agency had booked the accused under Section 120-B (criminal conspiracy) read with Section 420 (cheating) of the Indian Penal Code along with relevant sections of the Prevention of Corruption Act, 1988.
Also Read: As NDTV shares skyrocket after Adani bid, here’s how stock markets are valuing news firms
Notes by the CBI
In the closure report, the CBI concluded that sanctioning of Rs 375 crore loan by ICICI Bank was not an isolated case because the bank had disbursed loans amounting to Rs 8,400 crore to borrowers rated on a par with RRPR Holdings in the financial years between 2008 and 2010.
The agency stated that Indiabulls had sanctioned a loan of Rs 540 crore in 2008, for which Prannoy Roy and Radhika Roy and RRPR Holdings pledged their shares in NDTV.
To repay the Indiabulls loan, the Roys and RRPR Holdings took a loan of Rs 375 crore from ICICI Bank and the loan was foreclosed in October the same year.
On the allegation of violation of the Banking Regulation Act by sanctioning the loan, the CBI said the Reserve Bank of India confirmed that sanctioning of loans under NDU-POA (non-disposal undertaking-power of attorney) arrangement did not amount to a violation of the Act.
The NDU-POA is a system of securing loans against shareholding but without transferring ownership. The POA allows a trustee to manage the shares of borrowers who default on their loans on behalf of lenders who are not allowed to own shares of companies, according to Banking Regulation Act provisions.
The CBI in its probe relied on RBI’s master circular and stated that loans financed through NDU-POA are not the same as loans extended on pledged shares and hence the loan to RRPR Holdings was not in violation of the Banking Regulation Act.
The agency pointed out that the loan to RRPR Holdings was not the only loan sanctioned through this process and ICICI Bank had until October 2009 sanctioned loans amounting to Rs 15,000 crore to around 30 borrowers.
On the allegation of violation of SEBI laws by not disclosing the pledging of shares, the CBI said the SEBI had itself clarified in August 2017 that the “provision of foreclosure of pledged shares was inserted in the SEBI (SAST) Regulations 1991 in 2009”.
On the allegation of violating the policy of the Ministry of Information and Broadcasting (MIB) by pledging shares of a news channel licensed by the ministry, the CBI conceded that RRPR Holdings did not need permission from the ministry before pledging shareholding with any financial company.
On the allegations of reduction of rate of interest on loan to RRPR Holdings, the CBI stated that the company was not paying interest on the loan regularly and that the proposal for repayment of loan with reduced interest was approved by the bank’s credit committee.
The CBI documented that the reduction of interest rate was not an isolated case and that ICICI Bank had done the same exercise in 83 loan accounts in the financial years between 2007 and 2010.
“Forensic audit of record of loan conducted by M/s Pramod Kumar and Associates opined that there seems to be normal business transaction and closure of loan by ICICI Bank, there was no violation of Section 19(2) of Banking Regulation Act,” the agency stated in its closure report.
On the allegation that Vishvapradhan Commercial Pvt Ltd (VCPL) acquired over 61 percent of NDTV shareholding in a “clandestine” manner as RRPR Holdings re-financed its prepayment of loan by ICICI Bank through shell companies, CBI said that the companies used for the purpose, such as Shenano Retail Pvt Ltd, Reliance Strategic Investment Pvt Ltd, Reliance Ventures Ltd, were used for “operational convenience” on which there was no bar at the time of execution of loan agreement between VCPL and RRPR Holdings.
“It came in the investigation of CBI that M/s VCPL transferred Rs 350 crore to M/s RRPR on 05.08.2009 under a loan agreement dated 21.07.2009 and Rs 53.75 crore based on loan agreement dated 25.01.2010 through layer of companies like M/s Shenano Retail Pvt Ltd, Reliance Strategic Investment Pvt Ltd, Reliance Ventures Ltd, etc… those companies stated that the structure to lend money to RRPR Holdings through multiple companies was done in view of operational convenience and there was no forbidding of such multiple layers of subsidies,” according to the closure report.
“The rule that no company other than banking companies, financial companies, insurance companies, government companies, etc. shall have more than two layers of subsidies was incorporated only in a gazette notification dated 21.09.2017 of the Ministry of Corporate Affairs,” the CBI added.
(Edited by Nida Fatima Siddiqui)
Also Read: Prannoy and Radhika Roy and the world of news this week on
The same CBI which is getting the flak ” caged parrot” of BJP Govt has given clean chit- so hereafter will Dot Alliance stop calling CBI ” caged parrot” .As far as allegations r concerned when Banks were saddled with NPAs and RBI was scrutinizing all NPA accounts, naturally some suspicion arose wrt benefit of Rs48 cr given to Roys by ICiCI bank.So CBI had to investigate.
It’s simple and plain abuse of power by the Union govt. The Roys can be many things but they most certainly are not corrupt. Just because they are on the opposite side of the ideological divide, the govt agencies went after them.
The process is the punishment. And they have succeeded as the Roys have been forced to sell NDTV to Adani.