Was it a Rs 1,000-crore secret that Indrani Mukerjea wanted to take to her grave?

It has been over a month since ex-Star CEO Peter Mukerjea's wife Indrani Mukerjea was arrested in the murder of her daughter Sheena Bora, and the couple's name was splashed across front pages and TV channels. It's been over a month, and the case is still making headlines. 

It all seemed like a fast-pace thriller, the plot unravelling surely and quickly, as if it had its own narrator, flipping the pages. 

Since the news first broke on August 25, the police quickly arrested Indrani Mukerjea, the driver Shyam Manohar Rai, and even traced the case back to her ex-husband Sanjeev Khanna, and arrested him for his alleged involvement in the murder. 

Also read: Peter and Indrani Mukerjea, the media professionals

The wheel, however, broke when the Commissioner of Mumbai Police, Rakesh Maria, was promoted to DG Homeguard two weeks before his scheduled departure from the post. And this was just as he was closing in on a "financial angle" in the case which was otherwise taking the face of a family-dispute-gone-bad, relationships-gone-sour, and jealousy. The case was then handed over to the CBI. Usually, the CBI takes over a case when it is of national interest – for example, the Dabolkar case. What's the angle of national interest in the Sheena Bora murder case?

On October 2, Indrani was admitted to a hospital in Mumbai while still in custody at the Byculla women's jail, after she allegedly fell ill on overdosing medicines, a claim that Indrani later denied.

INX Media

INX Media was a company set up and run by Indrani as CEO and Peter Mukerjea as the Executive Chairman. INX Media soon had a slew of private equity investors – Mauritius-based New Silk Route, Singapore-government's Temasek, News Recruit, Kotak, New Vernon.

It is alleged that New Silk Route was set up to help form INX Media -- by Ex-Goldman Sachs director, Rajat Gupta and founder, Galleon Group, Raj Rajanatham – both serving a jail-term in the US for insider trading – among others.

However, according to the New Silk Route website and the company, New Silk Route (NSR) was founded in 2006. The company invested in INX Media in 2007 and 2008 along with a consortium of other well-known institutional investors, with NSR acquiring a minority stake of approximately 20%. After the sale of INX News in 2009, there was a major restructuring at INX Media including the departure of the founders from management. It was only two years later, in 2011 that NSR increased its equity stake in INX Media (renamed 9x Media) to become a majority shareholder.

Also read: Peter: Indrani Mukerjea saga -- The who's who of INX Media

INX Media was soon in business, with journalist Vir Sanghvi on board. However, it soon ran into cash troubles that Temasek later investigated, only to realise too late that the company was cash dry, and hundreds of crores of rupees were syphoned off; industry sources believe this to be nearly Rs 700 crore.

Vir Sanghvi and Peter Mukerjea, who were once close friends, were at loggerheads with each other, a source said, and Sanghvi quit only 18 months after he'd come on board. Peter and Indrani also exited the company by selling all their shares to private equity players, and moved out of the country, eventually settling in Bristol, UK. It is alleged that the couple got around Rs 450 - 500 crore through the deal.

ALSO READ: Peter - Indrani Mukerjea saga: Here's how the money travelled

The 2013 Serious Fraud Investigation Office draft report

A Serious Fraud Investigation Office draft report filed and leaked to the public in 2013, revealed the involvement of some high profile individuals in the setting up, and the subsequent sale of INX Media.

On November 11, 2013, the Serious Fraud Investigation Office filed a draft report on the basis of preliminary investigations of the Radia tapes recorded by the investigation wing of the Income Tax Department, which exposed the lobbyist's involvement in a number of high profile corporate deals.

This included the sale of NewsX, an INX Media channel, and the role of Unitech as a front-end company for Tata Group to get the 2G spectrum in 2008.

At the time of the draft report, Sachin Pilot was the Minister. Currently, Finance Minister Arun Jaitley holds the office of the Ministry of Corporate Affairs.

Niira Radia, the tapped conversations revealed, was brokering a deal for whom she counted her most important client. It is alleged, by the report, that the client was the Mukesh Ambani-led Reliance Industries.

The sale of NewsX

The SFIO report revealed a series of fraudulent transactions allegedly engaged into by RIL, with the help of the lobbyist, through several RIL-backed companies, to buy NewsX, while still keeping the identity of the largest Indian private sector company hidden. This report was leaked to the media, and was first carried by Outlook magazine in 2013.

On January 22, 2014, the SFIO, which comes under the wing of the Ministry of Corporate Affairs, filed a final report on the investigation. 

According to the SFIO report, there were a slew of companies allegedly involved in the sale of News X. Out of all these companies, according to the report, these account for the involvement of Reliance-backed Industries and companies where Reliance allegedly moved funds to.

Promoter Group companies of Reliance

Reliance Industries Limited

Hitech Dealers Pvt Ltd - Reliance promotor group moved funds to this company

Xanti Commercials Pvt Ltd - Reliance promotor moved funds to this company

Aarthik Commercial Pvt Ltd (earlier Reliance Communication Punjab P Ltd)

Suvi Info Management Pvt Ltd

Indi Media Company Pvt Ltd

NewsX, which was held by INX Media, and was sold to an Indi Media, a company allegedly funded by RIL, set up only about a month (November 21, 2008) before the sale of NewsX (January 7, 2009), the report states.

Indi Media, the financial books showed, was founded by Vinay Chhajlani, promoter and CEO, Nai Dunia, founder, Web Dunia; and former editor of Business World, Late Jahangir Pocha, who had quit the magazine to join the company. However, “Nai Dunia, which was portrayed as promoted by Chhajlani, was in turn funded by Aarthik Commercials, a Reliance Industries company,” the report said.

On January 7, 2009, Indi Media Company bought 92 lakh shares of INX News at the rate of Rs 10 per share from INX Media and IM Media, thereby becoming the holding company of INX News Pvt Ltd.

The transaction and a "wrongful loss"

The sale transaction entered into by IM Media and INX Media to sell shares of INX News, caused a “wrongful loss” of Rs 124.69 crore and Rs 43.81 crore to INX Media, respectively.

IM Media had bought shares of INX News between 2007 and 2009, including on the date of NewsX sale, in the price range of Rs 208.23 and 208.24 per share, a difference of only Rs 0.01.

However, when these shares were sold to Indi Media, they were sold at Rs 10 per share only, a drastic drop of Rs 198.24 per share, causing a significant wrongful loss.

The draft report says “there is no reason to show sudden decline in share price by a difference of Rs 198.24 only for the purposes of sale while maintaining the purchase price constant especially when it is a private limited company.” An over 20% fluctuation in share price raises a red flag, heralding a Sebi intervention.

Both IM Media and INX Media are funded by RIL, and so was the acquiring company, Indi Media, according to the SFIO report.

Which means, the companies entered into a purchase and sale transaction, only to cause a wrongful loss to gain access to NewsX.

K R Raja, a Senior Vice President of Reliance Industries, gave a statement to the IT authorities on August 7, 2012, when he also submitted two copies which indicated that both, INX Media and IM Media, who were majority stakeholders of INX News till January 7, 2009, were funded by private companies of Reliance Group. Raja reported to Manoj Modi, a close associate of Mukesh Ambani.

The Deal

Niira Radia set up Neucom Consulting, with the help of an “advancement of funds to the extent of Rs 2.5 crore” admitted K R Raja, “for setting up the company Neucom, and the funds advanced were to be adjusted against the subsequent billing for the services rendered under the Agreement entered into by RIL.

K R Raja had admitted his involvement in the investment made into INX Media. He also confessed to his involvement in the NewsX sale and defined the fund trail for the IT authorities.

“He admitted in having materialized the NewsX deal, the financial planning of the investment made by the Promoter group of companies of Reliance in the equity of M/s. INX News through companies of Ms. Indrani and Mr. Peter Mukerjea.”

He also admitted to have carried out the financial planning of the RIL investment through Aarthik Commercials, through Suvi Info Management which in turn, using its subsidiary, Indi Media.

Niira Radia, in a statement to IT Authorities, had admitted that Raja was later authorized by New Silk Route to co-ordinate on their behalf to explore an exit route for them from INX Media, which had outstanding creditors for an exposure of Rs 90 crore. She’d also admitted that RIL was her client, according to the SFIO report.

Raja had said that New Silk Route and other investors wanted to exit NewsX since it wasn’t performing well. He confessed to have been in constant touch with a Darius Pandole, who worked out of the New Silk Route office in Worli, Mumbai. After the consent of all the investors, the channel was sold to Indi Media, a company portrayed as owned by Chhajlani, “who was known to our group (Mr Mukesh Ambani).”

The report said that from the evidence gathered by the IT Department’s investigation wing, “it is evident that Nira Radia of Neucom Consulting was in serious conversation with Raja not only on account of incorporation of Neucom Consulting, which was funded by RIL but also instrumental in the sale of NewsX channel.”

Based on the evidence, the SFIO had recommended the following charges for the sale of NewsX in its report

— Charge under section 415 r.w.s. 418 r.w.s. 420 r.w.s. 120B in case of News X sale.

— Charge under section 628 of the Companies Act in case of M/s Neucom Consulting Pvt Ltd.

Section 415 in the Indian Penal Code relates to cheating and is defined by “Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”.”

While Section 628 of the Companies Act, 1956 states, “If in any return, report, certificate, balance sheet, prospectus, statement or other document required by or for the purposes of any

of the provisions of this Act, any person makes a statement-

(a) which is false in any material particular, knowing it to be false; or

(b) which omits any material fact knowing it to be material; he shall, save as otherwise expressly

provided in this Act, be punish-able with imprisonment for a term which may extend to two years, and shall also be liable to fine.

The final report sought to prosecute Radia under Section 628 of the Companies Act.

The first draft report by SFIO was filed on January 22, 2014. In February, the SFIO got a go-ahead to prosecute those named in the report. However, since, there have been little or no developments.