Media and ecommerce company NDTV has received a show cause notice from the Enforcement Directorate (ED) for alleged Foreign Exchange Management Act (FEMA) violations. Prannoy Roy, Radhika Roy, executive co-chairpersons of NDTV and K.V.L. Narayan Rao, executive vice chairperson of NDTV Studios Ltd (a subsidiary of NDTV) were named in the show cause notice, according to a notification in the Bombay Stock Exchange.
The show cause notice is related to why adjudication proceedings should not be held for alleged contravention of provisions of FEMA. “The Company has been advised that the allegations of the contraventions of provisions of FEMA in the show cause notice are not legally tenable and the Company will reply to the same within due course of time,” NDTV added.
In September, NDTV had informed the stock exchange that it had not received a notice from the ED and that it was merely sought additional information and documents from the company.
NDTV also ran into trouble with markets regulator SEBI earlier in June this year. SEBI had slapped a Rs 2 crore fine on the company for late disclosure of of information about a Rs 450-crore income tax notice the media company had received in February 2014.
NDTV had reported ecommerce business has reported revenues of Rs 4 crore for the quarter ended September 30,2015. The segment had posted revenues of Rs 2 crore in the same period last year. The ecommerce segment reported a loss of Rs 13 crore in the quarter against a loss of Rs 4 crore in the same period last year. Losses for the segment stood at Rs 8.39 crore in the preceding quarter. NDTV’s digital business reported revenues of Rs 26 crore for the quarter compared to Rs 20 crore in Q2FY15, showing a growth of 30%. The digital business reported a profit of Rs 2 crore in Q2Fy15 and reported no profit or loss in the current quarter, i.e. net profit stood at Rs 0.