Income Tax officials raided Media group Dainik Bhaskar and an Uttar Pradesh-based news channel Bharat Samachar on Thursday.
Unpaid taxes on ₹ 700 crore of income over six years, violation of stock market rules, and evidence of profits being siphoned off from listed companies have been found in searches at the Dainik Bhaskar Group, the Income Tax Department alleged on Saturday.
“During the search, it was found that they have been operating several companies in the names of their employees, which have been used for booking bogus expenses and routing of funds… Several of the employees, whose names were used as shareholders and directors, have admitted that they were not aware of such companies,” the tax department said in a statement.
“Such companies have been used for multiple purposes namely booking bogus expenses and siphoning off the profits from listed companies, routing of funds so siphoned into their closely held companies to make investments, making of circular transactions etc,” it said.
“The quantum of income escapement using this modus operandi, detected so far, amounts to ₹ 700 crore spread over a period of six years. However, the quantum may be more as the group has used multiple layers and investigations are being carried out to unravel the entire money trail,” it added.
A violation of rules of the stock market regulator Securities and Exchange Board of India (SEBI) for listed companies was also found, said the tax department. “Application of Benami Transaction Prohibition Act will also be examined,” it said.
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“A total of 26 lockers have been found at the homes of the promoters and key employees of the group, which are being operated,” the tax department added.
“Cyclical trading and transfer of funds among group companies engaged in unrelated businesses to the tune of ₹ 2,200 crore has been found. The enquiries have confirmed that these have been fictitious transactions without any actual movement or delivery of goods. The tax effect and violation of other laws is being examined,” it said.
“The listed media company does barter deals for advertisement revenues, whereby immovable properties are received in lieu of actual payments. Evidences have been found indicating cash receipts in respect of subsequent sale of such properties. This is under further examination,” it added.
Along with the Dainik Bhaskar Group, Bharat Samachar an Uttar Pradesh-based news channel was also raided on Thursday by Income Tax officials who launched searches around 5:30 am in their offices across the country.
Raids took place at over 30 locations of Dainik Bhaskar in Delhi, Madhya Pradesh, Gujarat, Rajasthan and Maharashtra. The offices and homes of the group’s promoters were also raided. Bharat Samachar’s offices in Lucknow and the home of its editor were also searched.
Recently, both the media houses had put out reports critical of the government’s handling of the coronavirus crisis, particularly the second wave of Covid that swept through India in April-May.
“The raids were a surprise and an obvious attempt to suppress independent journalism,” Dainik Bhaskar Editor Om Gaur told NDTV. “We won’t give in to pressure. We will stick to our journalism,” he added.
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