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

Gory details of the murky Sheena Bora case are still being unveiled every hour. There seems to be a web of lies, intrigue and hidden trails. Each revelation opens up new vistas of investigation. People who worked in the television industry, some closely with Indrani Mukherjea, are shocked that someone they knew and worked with could have so many hidden dimensions.

This isn't the only time that Indrani Mukerjea, wife of former STAR India CEO Peter Mukerjea, has tried to hide her past. In fact, it seems like her entire life revolved around covering her tracks. While the Mumbai police does its job of digging into her past, there's another aspect of the star couple's -- Peter and Indrani Mukerjea – life that has had covers over it for a long time.

The year was 2009. After spending 14 years in STAR, including eight years at the helm as the chief executive officer, STAR India, Rupert Murdoch's pick for India operations, Peter Mukerjea and the company decided to part ways. Peter left, and in tow were a slew of executives.

Given that Peter was a British citizen and had a no-compete clause after he quit STAR, a media company, INX Media was set up in his wife Indrani Mukerjea's name, with her in the CEO's chair. Peter joined the company as the executive director.

Attracting investors wasn't a difficult task, given Peter's credentials. The duo soon got funding from various private equity fund houses, including the then recently set up Mauritius-based New Silk Route Advisors (NSR). NSR was co-founded by six individuals, four of whom have been interrogated for insider trading at some point, and two – Ex-Goldman Sachs director, Rajat Gupta and founder, Galleon Group, Raj Rajanatham – are serving a jail-term for insider trading.

ALSO READ: Peter - Indrani Mukerjea saga: the who's who of INX Media

New Silk Route

Industry sources we spoke to believe that New Silk Route was a fund, a front company for corporates and individuals,  that wanted to bypass government regulations to invest into media companies in India.

While a foreign company could invest 100% in an entertainment channel in India, foreign investors were only allowed to hold up to 27% in a news company.

A source said, “it was like a benami investment”.

Money was routed through Mauritius and invested into the company.

A high profile lobbyist was brought in to negotiate a deal for a large conglomerate, into INX media.  Industry sources, investigation reports and an Serious Fraud Investigation Office report leaked to the public in 2013, suggest that the lobbyist was Niira Radia, and the company was the Mukesh Ambani-led Reliance Industries Limited.

Senior journalist, Vir Sanghvi was brought in as a partner and to head the news operations.

Soon, sources say, INX Media needed a credible investor, which would help them get more investors going ahead. This was also at the time that the media sector was booming in India, which means foreign investors were keenly eyeing investment opportunities in the country.

The INX Media team – Peter, Indrani, Vir Sanghvi, along with Niira Radia were in talks with Singapore government's Temasek Holdings, and soon the company was on board. An ET article from the time had quoted a spokesperson saying that the stake will be no larger than 25%.

"We have taken a minority stake in INX Media Pvt Ltd via our subsidiary, Dunearn Investments," Ambrish Sukhani, Temasek's associate director for investment in India, said in a statement."We are pleased to be able to contribute, through this investment, to the growth and development of India's vibrant broadcast industry," he had said.

So, Temasek came in as a respectable investor.

In all, according to an ET report, this is how the PE holding was distributed – Temasek 20%, New Silk Route (20%), Kotak Mahindra Bank, and New Vernon (10.01%), accounting for 50% of the company's holding. The other 50% was controlled by the Mukerjeas.

Soon, “money started to be spent badly; it was syphoned out of the company”, one source said.

NewsX was the first high-definition ready channel in India. Investments were lined up by the co-founding couple to set up the channel, with heavy spending in setting up studios, programming, and equipment. When a company buys equipment in bulk, they are eligible for discounts on market prices. While these discounts were availed, they were not passed on to the company; the invoices submitted listed market rates, according to a source.

The same followed in the case of new studios that were designed by friends, and inflated invoices were submitted, a source said.

TV channels pay carriage fees to cable operators. A source revealed that for NewsX, cable operators had been paid for a premium band. At a time when cable operators could only carry about 20 channels in a time band as against countless channels that digital operators can offer, they were paid off for NewsX. Here too, invoices totalling to much higher than the actual amounts were submitted.

“These cable operators were paid in cash, so carriage fees paid to hundreds and thousands of cable operators went untraced,” the source said.

Soon, tensions grew within the company as more and more money was going missing, the launch of NewsX had been delayed for a month, even when everything for a launch – set, equipment, payments to producers -- was ready, according to sources.

Temasek Holdings called for an audit soon after the global crisis in 2008, and found their worries being confirmed. Large sums of money had been syphoned off from the company.

Domino effect

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 Mukerjea exited the company, and moved out of the country, eventually settling in Bristol, UK. 

While the world watches the unfolding of Indrani Mukerjas involvement in Sheena Bora's murder case, maybe it will be advisable to follow the money too.