The Enforcement Directorate (ED) has sought a detailed report of the abruptly halted investigations in 2012 by the probe agency into the Rs 50-crore sale of INX Media, owned by Mukerjeas, to Indi Media Pvt Ltd.
The Enforcement Directorate (ED) has sought a detailed report of the abruptly halted investigations in 2012 by the probe agency into the Rs 50-crore sale of INX Media, owned by Mukerjeas, to Indi Media Pvt Ltd.
This is in the wake of Peter and Indrani Mukerjea's connection with the alleged murder of her daughter Sheena Bora, which has eventually opened a Pandora's box of large financial dealings, some of which are suspected to be through money laundering.
Insiders told dna that the case is likely to be reopened as the investigating authorities went slow and the case was finally shut inconclusive without any further direction.
"The incomplete report of the INX deal, earlier probed under Foreign Exchange Management Act (FEMA), has been sent to the ED's headquarters. We are anticipating a reply in a week whether to revisit it or not," an ED official told dna.
Sources in ED said they have held discussions to reopen the case over the past few days. But it is not yet clear that either it will be tried under anti-money laundering laws or continue with the charges of forex violation.
When contacted by dna, a spokesperson for INX Media Pvt Ltd (now called 9X Media Pvt Ltd) said, "The company has been in compliance with applicable laws."
dna has learnt that the entire deal has two major aspects – one, the foreign exchange violation by INX Media, and the other, changes in its shareholding pattern.
The case related to foreign exchange violation was registered under FEMA by ED in 2010 pertains to investment by three Mauritius-based companies in INX Media.
It was revealed that INX Media had secured approval from the Foreign Investment Promotion Board (FIPB) for foreign direct investment up to 46%. As per the probe, the foreign entities bought shares of INX at Rs 862.31 a piece, which was 86.2 times more than the face value of the share. "It was alleged that the FDI received by INX Media was invested in step-down subsidiaries of the media firm without prior approval of the board," said an official.
With regards to violations in the shareholding pattern of INX, Serious Fraud Investigation office (SFIO), under the Ministry of Corporate Affairs and which deals in financial crimes, had raised concerns in its final report.
According to the SFIO, Indrani Mukerjea owned 99% stake in the company that controlled Indi Media. The SFIO report says Indi Media was only a front company to mask the actual holding structure of News X and that the money for this venture had actually been given by a Mumbai-based industrial house that could not enter the media space directly since it was bound at that time by a non-compete agreement. So Indrani, who had no major finances of her own, was shown as owning 68% of INX News.
According to ED sources, this came to light when the agency was tasked by the government to probe financial transactions done by the Nira Radia group of companies. "In the said recorded tape conversation, Jehangir Pocha, the then editor-in-chief of News X channel, was being heard desperately urging Radia to transfer funds to News X kitty."
INX News Pvt Ltd was incorporated on 2006 had an authorised capital of Rs 7.5 crore divided into 75 lakh shares of Rs 10 each. On March 31, 2007, the share holding pattern of INX News showed that Indrani owned roughly 17% of the equity, former CEO and editor-in-chief Vir Sanghvi owned 16% stake, INX Media held 16%, while Indi Media held the majority 51% stake.
INX Media was Mukerjea's flagship company and was backed by global investors such as New Silk Route - Private Equity Mauritius, New Vermon Private Equity and Dunearn Investments.
In 2007, Peter Mukerjea and Indrani raised about $220 million from private equity firms Temasek Holdings, New Silk Route Advisors, Kotak SEAF India Fund, New Vernon Private Equity and SREI Group to start INX Media with a music channel 9XM and a Hindi general entertainment channel (GEC).
In 2008, the media firm launched NewsX, an English news channel. Within a year of launch, the news channel was sold to Indi Media Network, a joint venture between Nai Duniya owner Vinay Chhajlani and Jehangir Pocha.
In March 2009, Peter and Indrani exited the company after selling their 30% stake in loss-making INX Media. The same year, INX Media was renamed as 9X Media.
Subsequently, in 2011, New Silk Route increased its stake in the company to 80% by buying out all the other private equity investors in the company. SFIO investigated the sale of the Indrani-controlled News X to Vinay Chajjlani-owned Indi Media Pvt Ltd. It was completed in 2013 and report was also submitted. But like in the ED probe, no action was initiated.
According to the insiders, the clearance from enforcement agency on probe would also decide the fate of the five loss-making firms in Kolkata, owned by Mukherjeas, which are now under scanner of Mumbai police. The crime branch already shared the details of companies which are suspected to be fake.
The suspected firms are Ganga Excecutive Search, Yamuna Recruitment Services, Sarashwathi Media Ltd, Indrani Incon and Indrani Mukerjea News. Sources said these firms saw almost Rs 100 crore disappear from their books when Peter and Indrani were at the helm of affairs.
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