Reliance and INX Media: Elephant in the Room

Since the arrest of former Union Finance Minister Palaniappan Chidambaram in the INX Media case by the Central Bureau of Investigation (CBI) on August 21, and even earlier, there has been widespread coverage in the news media about this controversial media organisation. Chidambaram is in judicial custody and lodged in Delhi’s Tihar Jail.

In May 2017, the CBI had registered an FIR on the alleged irregularities committed by persons associated with the INX Media group while receiving funds to the tune of Rs 305 crore from outside India ten years earlier in 2007 although the Foreign Investment Promotion Board (FIPB) – the approving authority, then under the Ministry of Finance – had given its sanction for receiving a little under Rs 5 crore. Chidambaram was then Finance Minister in the first United Progressive Alliance (UPA) government led by Manmohan Singh.

The ED has alleged that documents found in the computer of Chidambaram’s son Karti’s chartered accountant indicate that payments were made to firms owned and controlled by Karti – now a Member of the Lok Sabha from Sivaganga, Tamil Nadu, belonging to the Indian National Congress – during the time the FIPB in the Finance Ministry granted the INX Media group approval to receive funds from overseas.

The main reason why Indian journalists have covered the INX Media case with voyeuristic curiosity is the sensational nature of the allegations. In 2015, Indrani Mukerjea and her husband, both of whom owned large shares in companies in the INX Media group, were arrested for their alleged involvement in the murder of Indrani’s daughter Sheena Bora. 

In July 2019, a special court in Mumbai allowed Indrani Mukerjea to become an approver in the INX Media case. On February 17, 2018, Indrani had claimed in a statement to the CBI that Karti had asked for a bribe of US$1 million in 2006.

What few news organisations have highlighted is the involvement of India’s biggest private company Reliance Industries Limited (RIL), headed by the country’s richest man Mukesh Ambani, in the episode. Companies in the Reliance group were reportedly involved in transactions relating to a complex web of shell companies that bought and sold shares in companies in the INX Media group, which also owned the English news channel NewsX for a period of time.


In May 2009, officials in the Income Tax Department started tapping phone calls of corporate lobbyist Niira Radia who counted among her clients, Mukesh Ambani. In one conversation (the transcripts of which were published in Open and Outlook weekly magazines in November 2010) Radia can be heard talking to the then editorial head of NewsX Jehangir Pocha. The conversation makes it amply clear that Pocha was not confident of paying salaries to his staffers without Radia’s support and sought assurances from her in this regard. 

Internal reports based on the Radia telephone taps were prepared by the then Director-General, Income Tax (Investigations) Milap Jain and Joint Director Ashish Abrol. Letters were exchanged between them and Vineet Agarwal, Deputy Inspector General, Anti-Corruption Branch, CBI. In a letter dated November 16, 2009, Agarwal wrote to Jain stating the following (grammar uncorrected):

“Radia and Jehangir Pocha have been in touch with (presumably Vinay) Chhajlani from Nayi (usually spelt Nai) Dunia (a Hindi newspaper published out of Indore, Madhya Pradesh). They wanted Nayi Duniya to front for someone else who wants to control a news channel in India, which later as per conversation turns out to be NewsX taken over from Peter and Indrani Mukherjee (spelt Mukerjea)...

“There appear to have been some cross-border transactions in this acquisition (of NewsX)… There are several conversations in this regard, including reference to a mail from Muthuraman (presumably B Muthuraman, former Managing Director, Tata Steel – the Tata group was among Radia’s clients) and by Baijal (presumably Pradip Baijal, former civil servant and Chairman, Telecom Regulatory Authority of India, who had worked with a firm set up by Radia), her associates...Baijal appears to be getting Reliance people on the pipeline regulatory agency.”

Before elaborating on some of these associations suggested in the Radia conversations, here is a look at the connection that existed between the INX Media group and the Reliance group.


The first person to write a detailed account on this subject was K S Narayanan in a report that appeared in the New Indian Express on January 9, 2011. He wrote: 

“This is how the NewsX deal happened: Vinay Chhajlani, who owns Suvi Info Management and its 100 per cent subsidiary Nai Duniya News and Network Pvt Ltd, was funded to the tune of Rs 38 crore through a transfer by Aarthik Commercials Pvt Ltd to Suvi Info. Aarthik Commercials is a private company and an amalgamation of Reliance Petromarketing Infrastructure, Jamnagar Kandla Pipeline Co, Agni Fuels, Avalanche Fuels, Jubilant Autofuels Trading and Steadfast Fuel Trading. It is owned by Mukesh Ambani, according to well-informed sources. Chhajlani wouldn’t have been able to buy NewsX if he hadn’t got the funds from Aarthik even though, in the final analysis, there may be no direct connection between Mukesh and NewsX. The annual returns of Suvi Info Management (Indore) Pvt Ltd for the year ending March 2007... show Vinay Chhajlani and his wife Sunita Chhajlani as shareholders and directors of the company.”

Narayanan’s report pointed that the balance sheet of Suvi Info indicated investments in Nai Dunia News and Network Pvt Ltd worth Rs 38.72 crore. Suvi Info’s balance sheet for 2006-07 shows an unsecured loan by Aarthik Commercials amounting to Rs 38 crore as well which was signed by Vinay Chhajlani.

More or less similar information was provided by an anonymous blogger (which has not been contradicted). Here is an excerpt from the blog: 

“The Annual Returns filed by Aarthik Commercials, 307 Parekh Market, 3rd Floor, 39, Jagannath Shankar Seth Road, Opera House, Mumbai list … the names … of these entities Jubilant, Avalanche, Agni, Reliance Petromarketing, Steadfast Fuel and Jamnagar Kandla (that) own 10,000 shares between them in the company. And the address for all these entities (is) a dead giveaway – Ground Floor, Chitrakoot, Shreeram Mills Compound, Gantpatrao (Ganpatrao, misspelled) Kadam Marg, Worli, Mumbai 400013, a known RIL establishment.” 

Both Narayanan’s article and the blog were based on information available to many (including this writer) in 2009-10 from sources close to Anil Ambani who was at that time engaged in a furious fratricidal fight with his elder sibling Mukesh Ambani. 

The NewsX channel was part of a corporate entity acquired jointly by Vinay Chhajlani and former Business World editor Pocha for a reported sum of Rs 50 crore. While the sources of funds of Chhajlani may be attributed to RIL associate Aarthik, there is no clue as to where Pocha raised funds to invest in a loss-making television news channel.

Control over, and ownership of, the channel moved to the Piccadilly group of companies controlled by former Industries Minister of Haryana and Congress leader Venod Sharma, better known as the father of Manu Sharma who was convicted for the murder of model Jessica Lal. NewsX is currently managed by Manu Sharma’s brother Kartikeya Sharma. The group currently operates a Hindi television news channel, India News, an English weekly Sunday Guardian and a Hindi newspaper Aaj Samaj. (Disclaimer: This writer worked with NewsX for a fortnight in August 2010.)

In April 2012, the Chhajlani family sold their stake in the company that publishes Nai Duniya to the Jagran Prakashan group for a reported sum of Rs 150 crore. 


The Mumbai branch of the Serious Fraud Investigation Office (SFIO) had filed a draft report with the Director of the office based in Delhi on April 23, 2013. This was part of the larger probe into possible criminal acts that were revealed in the telephone conversations of Radia that had been recorded by the Income Tax Department.

First, a bit about the SFIO that works under the Ministry of Corporate Affairs (MCA) and specialises in investigating complex financial transactions relating to companies. The SFIO could only have taken up this probe on the orders of the government and not otherwise.

The SFIO is a multi-disciplinary organisation under the MCA with experts from various disciplines such as accountancy, forensic auditing, law, information technology, investigation, company law, capital markets and taxation for detecting and prosecuting or recommending for prosecution those involved in white-collar crimes/frauds. The charter and responsibilities of the office include investigating only such cases that are characterised by:

(1) complexity and having inter-departmental and multi-disciplinary ramifications;

(2) substantial involvement of public interest to be judged by size, either in terms of monetary misappropriation or in terms of persons affected; and

(3) the possibility of investigation leading to or contributing towards a clear improvement in systems, laws and procedures.

The SFIO does not initiate any investigation on its own based on any complaints/documents received from any source. It takes up cases for investigation as and when ordered by the government, that is, the MCA under Sections 235, 237, 239 and 247 of the Companies Act, 1956. As per Section 235 of the Act, inspectors appointed by the MCA exchange notes about suspected frauds committed by promoters and directors of companies. Thereafter, they prepare notes recommending whether or not there is a fit case for launching prosecution proceedings against the persons concerned. The final sanctioning authority granting approval of prosecution is the MCA. 

Returning to the INX Media case, since the filing of the draft report by the Mumbai branch of the SFIO in April 2013, there has not been any information in the public domain of any action taken by the MCA on its own probe. The report may neither have been finalised nor the investigation completed during the tenures of successive ministers in charge of the ministry, including Sachin Pilot who was the Union Minister of State (holding independent charge) of the MCA from October 2012 to May 2014, when the UPA government was in power, and ministers in the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government such as the late Arun Jaitley, Piyush Goyal or the current minister in charge of the MCA Nirmala Sitharaman.

On November 7, 2013, and five days later on November 12, two reports written by this writer were published in website. The reports detailed the investigation by the SFIO into the transactions allegedly made by RIL through a web of shell companies to control the corporate entities directly or indirectly owning or controlling the NewsX television channel in a manner that allegedly resulted in substantial losses to RIL’s shareholders.

On November 11, documents relating to these allegations (including the draft SFIO report) were submitted in the Supreme Court (see attachments). The petitioner was the Centre for Public Interest Litigation represented by political activist and lawyer Prashant Bhushan. A bench of the apex court comprising Justices G S Singhvi and V Gopalagowda was urged to order a fresh investigation into the allegations contained in the SFIO’s draft report.

The SFIO draft report was attached to the second report in published on November 12. These documents have been public since then and its authenticity has never been challenged.


According to the draft report, a company called Indi Media Private Co Limited bought 92% of INX News Private Limited in 2009 by way of subscription equity. INX News Private Limited was incorporated on December 22, 2006, to launch the channel NewsX. The report stated that based on Income Tax Department investigations it was proven beyond doubt that the sale of NewsX channel was a “premeditated plan” and a “sham transaction” of the Reliance group to acquire control over INX News Pvt Limited in January 2009 “through its front companies” by deploying a “web of transactions.”

Excerpts from the draft SFIO report are reproduced below (grammar uncorrected):

“The question which is thrown open for further investigation is the interest of Reliance in New Silk Route (NSR). From the NewsX deal, it can be seen that the NewsX channel was in fact a hindrance in allowing controlling shareholding to New Silk Route in the equity of INX Media Pvt Ltd which in turn held 29 per cent equity of INX News Pvt Ltd which ran (the) NewsX channel. INX Media Pvt Ltd was then a subsidiary of IM Media Pvt Ltd which in turn held 62.9 per cent equity of INX News Pvt Ltd. Since the ... FDI (foreign direct investment) (limits) did not allow (for) higher investment (more than 48 per cent) in (news) media (companies)... the entire exercise of sale of NewsX channel was undertaken to dissociate (it)...from INX Media Pvt Ltd.”

Before proceeding further, some information about NSR is provided here to contextualise the deals. The founders of New Silk Route include Rajat Gupta, former managing partner, McKinsey and Company, Raj Rajaratnam, former managing partner of the Galleon group, Victor Menezes, former vice chairman, Citigroup, Anil Kumar, former senior partner, McKinsey, and Parag Saxena, former managing partner of Invesco Capital and Vedanta Capital. All these five individuals have, at different points in time, either been targets of investigation relating to, or found guilty of, violations of civil and criminal laws in the United States, including the law against insider trading in stocks and shares. 

NSR, a venture capital firm focussed on making investments in Indian and Asian companies, was established in 2006 with assets under management worth $1.4 billion. Over and above the five individuals mentioned earlier, the founders of NSR included Abdul Hafeez, former Finance Minister of Pakistan and Mark Schwartz, former Chairman of Goldman Sachs Asia and Chief Executive Officer of Soros Fund Management. Among the Indian companies NSR had invested in was Reliance Telecom Infrastructure. 

Coming back to the draft report of the SFIO, it added: “After sale of equity of INX News Pvt Ltd to Indi Media Pvt Ltd, (the former) was controlling only the entertainment channels, namely, 9X, 9XM (etc.) In the (case of) entertainment media, 100 per cent FDI is allowed. Therefore, by organizing the sale of NewsX channel to Indi Media Co Pvt Ltd funded by (the) Reliance group, the channel was held under its (Reliance’s) control, as... already established by way of equity holding and (what has been disclosed) in the transcripts of (conversations of) Niira Radia...simultaneously, New Silk Route was allowed a marching entry having controlling stakes in INX Media Pvt Ltd...”

The SFIO report then provided a table that indicated that: “…the true story which Shri (K R) Raja (of RIL) tried to conceal.... (is that) the majority stakes in INX Media Pvt Ltd (79.38 per cent) are in the hands of NSR-PE (New Silk Route-Private Equity) contrary to what Shri K R Raja tried to portray. Thus, the sale of NewsX was not organized to allow exit to NSR and the other promoters. The real reason was to introduce NSR as the controlling stakeholder in INX Media Pvt Ltd and this was not possible as long as the NewsX channel was in the control of INX Media Pvt Ltd (it being the holding company, INX News Pvt Ltd) ... in order to allow controlling stakes to NSR in INX Media Pvt Ltd it was (of) utmost importance to turn it wholly into an entertainment channel.... By dissociating NewsX from INX Media Pvt Ltd and to accomplish the sale of NewsX channel, another company named Indi Media Pvt Ltd was incorporated (on 27 November 2008) just a month before the date of sale of NewsX channel on 7 January 2009...”

What the SFIO alleged is that the sale of the NewsX to Indi Media Private Limited in January 2009 was done since the news channel prevented the Mauritius-based company New Silk Route (NSR) from acquiring INX Media Private Limited due to the cap on FDI in a news company.

The other aspect of the deal that raises doubts is the price at which the shares of INX News Private Limited were eventually sold. The shares were sold to Indi Media Private Limited at just Rs 10 each, even though these had been acquired by IM Media Private Limited, the largest shareholder of INX News Private Limited at around Rs 208 each. Interestingly, 15,72,500 shares of INX News Private Limited were bought by IM Media Private Limited for Rs 208.24 on January 7, 2009, and sold to Indi Media Private Limited at less than 5% the rate or just Rs 10 per share the very same day!

The draft report of the SFIO added: “This deal caused wrongful loss of Rs 124,69,29,533 (or Rs 124.69 crore) to INX Media Private Limited.”

How was Indi Media Connected to Reliance? According to the SFIO’s draft report, Aarthik Commercials Private Limited is owned by RIL. Suvi Info Management Private Limited was funded Rs 242 crore directly through convertible coupons by Reliance. Suvi was also funded Rs 38 crore by Aarthik Commercials Private Limited. And Indi Media Company, which went on to acquire ownership of NewsX, was a 100% subsidiary of Suvi. This is how the Reliance group managed to fund Indi Media which was incorporated less than two months before it bought INX News Media Private Limited on January 7, 2009. The details relating to how Reliance funded INX media and NewsX have been fleshed out in two charts published by the SFIO in its draft report (see pages14 and 32).


The draft report also questions the actual ownership structure of INX Media. The report came to the conclusion that through a web of shell companies like Xanti, Hitech Dealers and other entities, promoter companies in the Reliance group had already acquired a stake in INX Media Private Limited before the rest of the deal materialised. 

According to MCA records, Indrani Mukerjea owned 99% stake in Ganga Executive Search Private Limited, the company which controlled IM Media. However, the SFIO draft report alleged that these were just front companies that were put up to hide the original source of funding, namely, corporate entities associated with the Reliance group.

The report significantly stated: “Thus, it can be seen that the buyer and seller were one and the same group, that is, Reliance. The maze of companies and web of fund movement was created only to hide the identity of the group.”

What is not clear is the exact nature of the relationship between NSR and RIL and the draft report of the SFIO called for a “thorough investigation” into the links between NSR and the Reliance group. The SFIO came to this conclusion in 2013. Its report is based on the deposition of K R Raja (mentioned earlier), who was the senior vice president of RIL handling corporate finance. He reported to Manoj Modi, a close associate of Mukesh Ambani.


There’s yet another twist to the tale. In an interview to Shougat Dasgupta published in Tehelka on October 23, 2014, two days after he quit his job as editor of The Hindu newspaper, Siddharth Varadarajan was quoted as saying: “On the day I quit I was editing a blockbuster of a story involving RIL, Mukesh Ambani and a private media company.” 

It is reliably learnt from anonymous sources that the story Varadarajan was referring to related to the SFIO investigation into RIL and its “shell companies” that invested indirectly in the INX Media group. It is not known if the SFIO’s investigations found any violation of FDI norms by NSR or any other company, including those associated with RIL and/or INX Media.

The allegedly fraudulent set of transactions have been linked to corporate entities controlled not only by Radia and NSR but also to a gas transportation company that was a subsidiary of RIL and which was supposedly “converted” into the “private property” of Mukesh Ambani “through a maze of private companies” in what has been described as a “classic manoeuvre” in the draft report of the SFIO.

The SFIO’s draft report stated: “Investigation of the sale of NewsX has revealed that the funds had been moved from Reliance Gas, Ornate Traders Pvt Ltd, Reliance Explorations, (and) Reliance utilizing a maze of private companies to make investments in INX News Pvt Ltd…

“Further investigation into these (corporate) entities has revealed that Reliance Gas Transportation Infrastructure Limited (RGTIL) was incorporated on 19 March 2003 as a subsidiary of Reliance Industries Limited for transportation of gas from RIL’s gas fields from the KG (Krishna-Godavari) basin. On 18 August 2004, RGTIL, while it was still a 100 per cent subsidiary of RIL was granted approval by the Petroleum Ministry to transport 80 million units of gas per day from Kakinanda to Bharuch passing through four states (Andhra Pradesh, Karnataka, Maharashtra and Gujarat... On 21April 2005, RIL chairman Mukesh Ambani quietly without any disclosure stripped RGTIL from RIL and converted into his personal property at a meagre price of just Rs 5 lakh.”

The SFIO document named the “maze of private companies” through which this deal had been struck. These included Lordwest Invest & Trading, Shangrila Invest & Trading, Proline Invest, Jigna Fiscal, Vayudoot Invest & Trading, Yashasvi Holding and Anumati Mercantile. This “classic manoeuvre,” according to the SFIO’s draft report, enabled India’s richest man to convert a wholly-owned subsidiary of the country's largest private corporate entity into his “personal property.”. 

It was pointed out that these companies had directors who were Reliance group employees and their registered office addresses were also the ones where other RIL group companies are registered -- 84A Mittal Court, 505 Dalamal House, 147 Atlanta, which are located in and around Mumbai’s Nariman Point business district.


After the arrest of Indrani Mukerjea on August 25, 2015, Rakesh Maria, the then Commissioner of Police, Mumbai, was reportedly probing if there was a financial angle to the Sheena Bora murder case. The Devendra Fadnavis government transferred him while he was bang in the middle of the probe.

An editorial in the Hindu published on September 10, 2015, read: “It (Maria’s transfer) came at a time when the 1981-batch IPS (Indian Police Service) officer was steering the investigation in the Sheena Bora murder case towards crucial financial dealings possibly linked to the crime. The investigators had put together a team of chartered accountants and Economic Offences Wing officers to probe a complex web of shell companies, and requested the Enforcement Directorate to follow the money trail. Chief Minister Devendra Fadnavi’s signing the transfer order just before leaving for Japan reinforced the impression that the government did not want Mr Maria to proceed with the probe.”

The SFIO draft report became newsworthy again in 2015 after the arrest of Indrani and Peter Mukerjea for the alleged murder of Indrani’s daughter Sheena Bora and the transfer of Maria. While some media organisations played safe and did not name Reliance, there were others who were not reticent.

A report in India Today by Rahul Kanwal published on August 29, 2015, read: “The SFIO report says that IM Media was only a front company to mask the actual holding structure of NewsX and that the money for this venture had actually been given by a major industrial house that could not enter the media space directly. This corporate house was bound at that time by a non-compete agreement.”

The name of Reliance is not mentioned even once in the India Today report. Daily newspapers such as the Economic Times and Business Standard also shied away from mentioning the ‘R’ word. However, Outlook and Tehelka weeklies and the daily DNA did mention Reliance and Mukesh Ambani.

A cover story in Outlook dated August 29, 2015, read: “It later emerged that the Mukesh Ambani owned Reliance Industries Limited and a group of investment bankers had actually bailed NewsX out… Indrani signed loan agreements by which loans were received from the promoter group companies of Reliance Industries Limited. Shares valued at Rs 10 carried a premium value of Rs 208…”

Two days later, a report published in DNA read: “A high profile lobbyist was brought in to negotiate a deal for a large conglomerate, into INX Media.  Industry sources, investigation reports and a 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.”

On September 12, 2015, Tehelka magazine stated: “In a complaint to the Press Council of India in 2010, Mukesh’s younger brother Anil Ambani alleged that the Mukesh Ambani Group has lent and advanced over Rs 100 crore to the Vinay Chhajlani Group, M/s Suvi (Info) Management (Indore) Pvt Ltd, and M/s Nai Duniya Media Pvt Ltd”, adding that the “Vinay Chhajlani group owns Suvi Info Management and Nai Duniya, which is a 100 percent subsidiary of Suvi Information Management… Thus, all the three entities were related.”

A March 2018 article in Outlook magazine by Ushinor Majumdar quoted a report by the Income Tax Department prepared in 2009 that, by and large, corroborated the findings of the SFIO. The article quoted the then Additional Solicitor General of India Anil Singh telling the CBI court in Mumbai in 2015 that the agency had traced Rs 900 crore to a Singapore bank account in Sheena Bora’s name and added: “It was widely reported that this transaction happened through nine shell companies (associated with the INX Media group) but this has not been mentioned in the charge-sheet” because the CBI was waiting for a response to the letters rogatory that it had sent to Singapore.

While the arrest of Chidambaram has drawn widespread media attention to the INX Media group, the alleged involvement of India’s richest man Mukesh Ambani and the company he heads in the entire episode, is all but whispered behind closed doors.

Writing and research support by Sourodipto Sanyal.

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