Mint says SEBI looking into RIL-TV18-ETV deal

Finally, some critical coverage of the Reliance-Network18/TV18-ETV deal in the business media.

Mint, the business newspaper from the Hindustan Times stable, has a story in today’s issue that the stock market regulator, SEBI, is looking into RIL’s financial statements and reports to see if the company had divulged its holding or investment in ETV before the matter became public.

RIL revealed in 2011 in response to a petition filed by the late Andhra Pradesh chief minsiter Y.S. Rajasekhar Reddy‘s widow, Y.S. Vijayalakshmi, that it had put in money into Ushodaya Enterprises, ETV’s holding company, through Nimesh Kampani‘s JM Financial in 2008.

Vijayalakshmi had alleged (page 32 of petition) that RIL’s investment in Ushodaya was its way of saying thanks to the previous TDP government of Chandrababu Naidu, for wilfully surrendering Andhra Pradesh’s right over the discovery of gas in the Krishna-Godavari basin in favour of RIL.

Eenadu founder Ramoji Rao, an associate of Naidu, had been used by RIL as a “vehicle of the quid pro quo.”

Now, Mint quotes an unnamed “senior SEBI official” as saying:

“SEBI is looking into whether RIL has disclosed in any of its financial reports about its holding or acquisition of stakes in Eenadu Group to the shareholders. It is mandatory to disclose such information to the shareholders.”

A second unnamed source is quoted as saying:

“Prima facie, information about RIL’s holding in Eenadu Group is not disclosed anywhere specifically. As per the listing agreement norms, it should have been mandatorily disclosed. This amounts to possible violations of regulations.”

S.P. Tulsian, a stock market analyst who often appears on CNBC-TV18, is quoted as saying:

“I am surprised that RIL said in the Andhra Pradesh high court that the stake acquired by JM Financial in the ETV channels was on behalf of itself. I went through the balance sheet but did not find anything of this nature.”

Niraj Mansingka, an analyst at Edelweiss Securities Ltd, is quoted as saying:

“We believe the equity investment [by RIL in Eenadu group] may have been consummated recently as the same is not a part of RIL’s FY11 annual report.”

The question marks over RIL’s disclosure of its investment in ETV underline a quote from an unnamed “broadcast veteran” in an Outlook* magazine article: