Spot on!

I thoroughly enjoyed reading Rajasrshi Bhattacharjee’s article ‘Building the perfect property’ in the latest issue of Business Standard. In the article, Ramanujam Sridhar of brand-comm rightly recognises that ‘The property you are trying to create needs to be close to your core proposition’.

Several brand campaigns fall flat because they fail to keep this simple insight in mind. I know this is true from my 16 years in outdoor media solutions business.

I hope to see a similar article on the art and skill on using outdoor media to build a brand in my favourite media publication.

Thank you for doing such a great job.

Sanjeev Gupta

MD, Global Advertisers

Spot on!

I thoroughly enjoyed reading Rajasrshi Bhattacharjee’s article ‘Building the perfect property’ in the latest issue of Business Standard. In the article, Ramanujam Sridhar of brand-comm rightly recognises that ‘The property you are trying to create needs to be close to your core proposition’.

Several brand campaigns fall flat because they fail to keep this simple insight in mind. I know this is true from my 16 years in outdoor media solutions business.

I hope to see a similar article on the art and skill on using outdoor media to build a brand in my favourite media publication.

Thank you for doing such a great job.

Sanjeev Gupta

MD, Global Advertisers

Sanjeev Gupta

Spot on!

I thoroughly enjoyed reading Rajasrshi Bhattacharjee’s article ‘Building the perfect property’ in the latest issue of Business Standard. In the article, Ramanujam Sridhar of brand-comm rightly recognises that ‘The property you are trying to create needs to be close to your core proposition’.

Several brand campaigns fall flat because they fail to keep this simple insight in mind. I know this is true from my 16 years in outdoor media solutions business.

I hope to see a similar article on the art and skill on using outdoor media to build a brand in my favourite media publication.

Thank you for doing such a great job.

Sanjeev Gupta

MD, Global Advertisers

The ” Modi”fied article of BBC can be read here:

“Gujarat IS a red hot economy.”

In what can be termed as acute embarrassment to major media houses, a “Modi”fication of articles that were published, based on GDP of Gujarat state was done hurriedly. Today Business Standard, one of India’s leading newspaper, carried an article by AK Bhattacharya, with a set of figures that depict growth in Gujarat, trying to drive home a point that ‘growth of Gujarat is a myth’. Soon, other media houses like Rediff, and surprisingly the British Broadcasting Corporation joined the bandwagon. this resulted in print media splashing articles quoting the figures quoted by Business Standard. BBC even went to the extent of nailing Gujarat with a story titled “Is Gujarat’s Red Hot Economy a Myth?” But soon followed counter figures, with accurate proof, which put the very  same media houses to shame. The article published byBusiness Standard quotes the GDP of Gujarat as 6.3%, where as the actual figures stood at a towering 10.08%.

The credit of exposing the leading media houses and their credibility goes to Vijay (@centerofright) who exposed the mammoth difference between the real figures and what was contorted and published. With the real facts presented before them,Business Standard was forced to edit their original article and issue a clarification that read thus: This column has been modified to incorporate corrected data. (Read the article here).

The step taken by Business Standard of publishing the original article without conforming to real data and their subsequent correction led to an outright flurry over Twitter, the micro-blogging site. There were rampant discussions that questioned the credibility of leading media houses and the news they present the common man with. Even the reliability and integrity of BBC stood at stake. A shamefaced BBC had to change the title of their article to ‘Gujarat IS a Red Hot Economy’.

“It is silly that reputed media houses made mistake in a topic like GDP of Gujarat when Growth of Gujarat is a heavily debated issue.” Many tweeple raised their concern.

The ” Modi”fied article of BBC can be read here: “Gujarat IS a red hot economy.”

Related articles

• Indian Politicians on Twitter:Modi Express #1 (indologygoa.wordpress.com)
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and then

The original article in Business Standard by AK Bhattacharya.

http://www.scribd.com/embeds/92187799/content?start_page=1&view_mode=slideshow&access_key=key-111sv1hgm44z54lbkunc

Then i had tweeted a bunch in the morning and left it at that and forgot about the same.

Then Soutik From BBC Came up with this Gem and a link to his BBC Article with a Headline – Is Gujarat Red Hot Economy a Myth? quoting the same Business Standard article.

Read the full posting: How Business Standard and BBC had to Retract a Story on Gujarat.

Do read RT @pragmatic_d What does the SGDP growth rate data of states since 2004-05 tell us? Evidently, nothing. business-standard.com/india/news/a-k…—
Amit Paranjape (@aparanjape) May 02, 2012

and then

BS Editor AKB punctures Gujarat's growth claims in his column.6% growth for 7 yrs.Whereas Mah, TN & Haryana hav had double digit growth—
Vivek Sengupta (@vsengupta) May 02, 2012

The original article in Business Standard by AK Bhattacharya.

Then i had tweeted a bunch in the morning and left it at that and forgot about the same.

business-standard.com/india/news/a-k… – Basic Arithmetic & Economics gone for a toss and he writes for business standard—
Vijay (@centerofright) May 02, 2012

So Mr. Bhattacharya writes that Guj had 6.3% growth Annually from 2004 – 2005 to 2010-2011 in 7 years 1/n—
Vijay (@centerofright) May 02, 2012

2/n – 2004-05 -GSDP at current prices – 203373 Crores – 2010-2011 – 513173 Cr – Avg Growth 21.76%—
Vijay (@centerofright) May 02, 2012

3/n – 2004-05 – GSDP at constant prices – 203373 Crores – 2010-2011 – 365295 Cr – Avg growth rate – 11.37%—
Vijay (@centerofright) May 02, 2012

4/n – 2004-05 – NSDP at current prices – 172265 Crores – 2010-2011 – 440942 Cr – Avg growth rate – 22.28%—
Vijay (@centerofright) May 02, 2012

5/n – 2004-05 – NSDP at current prices – 172265 Crores – 2010-2011 – 309409 Cr – Avg growth rate – 11.37%—
Vijay (@centerofright) May 02, 2012

6/n – soeconomists, mathematicians and experts, can you please look at numbers and say how was it 6.3% growth for 7 years in guj—
Vijay (@centerofright) May 02, 2012

Then Soutik From BBC Came up with this Gem and a link to his BBC Article with a Headline – Is Gujarat Red Hot Economy a Myth? quoting the same Business Standard article.

Is Gujarat's red hot economy a myth? bbc.co.uk/news/world-asi… #India #Gujarat—
soutik biswas (@soutik) May 02, 2012

The Original BBC Article is Below.

As usual again the crowd went delierious now with even BBC quoting it.

That is when i said enough and put out a challenge of a lakh of rupees for anyone to prove the BS & BBC Numbers or retract and modify.

I am ready to put in a lakh of rupees to anyone who can prove that Gujarat has grown by 6.3% in last 7 years as mentioned in BS—
Vijay (@centerofright) May 02, 2012

Any one ready for that challenge? Else a public apology by everyone who carried that BS article including Rediff, BBC and others is in order—
Vijay (@centerofright) May 02, 2012

Last but not the least – Accept your intellectual dishonesty of not doing your fricking homework and you call urself esteemed—
Vijay (@centerofright) May 02, 2012

After the above then the first retraction and corrected article in Business Standard comes up.

Followed by the BBC with a change in Head line – Gujarat IS a Red Hot Economy – Article below.

All i say is, you may have liking or hatred towards Narendra Modi. Try the electoral route to defeat him or try proving that the numbers he quote are wrong with facts and please don’t peddle falsehoods as facts.

Also remember that every state’s growth is a growth for India as a whole. I donot know how folks can forget this simple fact. The reason the negative campaign was to be countered as remembered that a lie repeated N number of times becomes the truth.

P.S. Business Standard carried this correction in their news paper on Page 10 4th May Edition. Just putting it on record.

Someone pass this news on to LADY GAGA.  It might get her to tone it down from “INSANE” to “moderately unusual.”

According to a new survey, the average woman doesn’t hit her FASHION PEAK until age 35.

That’s the age when women are confident because they still feel their bodies are YOUNG . . . but they also really know themselves, know their style, and know how to dress right.

The researchers said, quote, “Confidence, knowledge, and wisdom are crucial when it comes to looking good.  You can have all the latest trends and must-have fashion items but if you don’t have the confidence the whole look is wasted.”

The survey also found 59% of women say they’re guilty of, quote, “dressing too young for their age.”

Business Standard

Speaking to Business Standard, Kimmo Alkio, president and CEO, Tieto Corporation said, “Concern and uncertainty about the European economy and the euro crises led to job cuts. Our aim is to make Tieto among top three service provider company. By 2016, we are expecting to grow by 15 per cent. Our strategy seeks to strengthen our position in our core markets and as a leading player in the global product engineering solutions space by consolidating our core markets and leveraging our industry expertise to deliver superior value to customers.”

Eventhough, Alkio did not disclose how it will impact on the Indian operations or how many jobs will be cut in India. Currently, there are over 1600 of Tieto India employees. It has delivery centres in Pune and Bangalore. It will focus on specific industries particularly financial services, government and health care, manufacturing, telecommunications and utilities. Its 20 per cent of revenues come from product engineering services…

Source:

Read More @ Despite job cuts, Tieto focuses on strategy revamp.

Editorial in Deccan Herald:

“There is reason for deep concern over the report in a national daily, The Indian Express, about an ‘unexpected (and non-notified) movement’ of two army units towards Delhi on the night of January 16-17… To insinuate that General V.K. Singh would attempt a coup to settle scores with the government is downright slanderous. It is an insult to the Indian Army, which has an unblemished record of being an apolitical force. There are enough safeguards in our system to ensure the supremacy of the civilian government over the military.

“It does seem that the newspaper read too much into what was a harmless and routine movement of army units. It should have exercised greater caution and responsibility in reporting the story the way it did.”

Editorial in The Hindu:

“The Indian Express is entirely within its rights to write about a sensitive matter like this, even if its treatment was overblown. Just as it is unfair for anyone to cast aspersions on the Indian Army, it is unfair to question the motives of the journalists who wrote the story.”

Jim Yardley and Hari Kumar in the New York Times:

“The article, splashed across the front page, created a sensation in the Indian news media, stirring a discussion on the country’s all-news channels and on Twitter, where many criticized the Express for, they said, sensationalizing the episode when relations between civilian and military leaders are already fraught….

“Uday Bhaskar, a retired Indian Navy commodore, agreed that mistrust between military and civilian leaders had deepened, partly because of the poisonous political environment in New Delhi, which he said was fueled by an increasingly sensationalistic media.”

Sandeep Bamzai in Mail Today:

“A leading daily may have unintentionally extrapolated from the website report and sensationalised the story. Or it may have got it right because as they tell us the event is dated January 16 this year. But to run a story of this magnitude may well be a disservice to media and to national interest. Because now it is not just the Army chief, but the Armed Forces which will be viewed with suspicion.”

Editorial in the Economic Times:

“The overall fallout of the story is to lower both the army chief and the defence minister in public esteem, as those who bumble into a messy civil-military standoff.”

Manoj Joshi in Mail Today:

“In journalism, there are dividing lines that define when a news report informs, analyses, titillates or sensationalises. But there is just one line which separates a report which serves national interest from one which does disservice to it. The report in a national daily, which talks about the movement of two crack Indian Army units towards New Delhi on the night of January 16, not only makes unwarranted conjectures, but in the process, damages the body politic of the country.”

Editorial in the Business Standard:

“A binary choice should not be forced on this discussion. Talk of a coup is absurd and the newspaper report may be alarmist; yet there are questions that must be addressed…. Anything less than direct engagement with the substance of the Express report would serve to further undermine public trust in the institution.”

News item in M.J. Akbar‘s Sunday Guardian:

“Sources involved in tracking sensitive developments claim that a senior minister of the UPA government was the mastermind of the April 4 front page item in a daily newspaper about a suspected coup attempt. The sources claim that the minister is connected – through his close relative – with the defense procurement lobbies gunning for Chief of Army Staff General V K Singh, and that the decision to “trick the newspaper into running a baseless report was to drain away support for General Singh within the political class”, who could be expected to unite against any effort at creating a Pakistan-style situation in India….

“According to these sources,the minister in question “is well-known to senior journalistic levels of the publication” that ran the coup report. A military source was “surprised that the newspaper in question ran such a story,in view of the high level of competence of its senior staff”, but added that ” a senior minister being the source of the initial information would explain their belief in the truth of the report”.

Also read: Indian Express ‘C’ report: scoop, rehash or spin?

Indian Express stands by its ‘C’ report

The group is parting ways with the Rupert Murdoch-controlled television group after months of discontent over editorial and other strategic issues, the newspaper said, citing an unnamed official involved in the negotiations.

“It’s final now. The two legal teams are working out the details and the fine print will be clear very soon,” it quoted the official as saying.

Dipankar Das Purkayastha, managing director of Anandabazaar Patrika, denied any such plans, the paper said.

Media Content & Communications Services India Pvt Ltd, the joint venture, runs three news channels in India – STAR News in Hindi, STAR Ananda in Bengali and STAR Majha in Marathi.

“This is a closely held joint venture. I am not going to comment on market speculation,” the paper quoted Uday Shankar, chief executive of STAR India Pvt Ltd, as saying.

Luxury brands have taken to experiential marketing with gusto; many consumer durables companies are also focusing this tool for their luxury products

Sandeep Sethi, a senior real-estate marketing professional, was blown away by the experience during his first visit to the Audi store at Mathura Road, New Delhi. The showroom was spacious, which made him feel comfortable, and he could easily cruise through the store without encountering any roadblocks. The various models were neatly displayed, and help was at hand in case he needed to clear any doubt. He was thoroughly impressed by the professionalism. Now Sethi drives around in an Audi A4.

This two-storey showroom of the German luxury car manufacturer, Audi, has 20 cars on display, and is spread over an area of 30,000 sq ft. The showroom is based on the unique Audi Terminal concept and has a unique 250-ft wide store front. It has a honeycomb aluminum façade and inside the showroom there are escalators to ferry prospective buyers up and down. It hosts the Audi Shop and the Audi Exclusive Elements, where customers can order customised products and purchase a variety of Audi branded merchandise. “Audi has 15 showrooms in India based on the Audi terminal concept. Six of these are Audi terminals and the rest are Audi terminal concepts. While the terminal’s architecture embodies the sportiness of the brand, the aluminium façade reflects Audi’s expertise in lightweight design,” says Michael Perschke, head, Audi India. In short, the onus is on providing a unique experience first — no hard sell, no desperate salesmen shadowing you till the end of the aisle. But Audi is not alone. Most luxury brands have taken to experiential marketing with gusto; many consumer durables companies are also focusing this tool to showcase their luxury products.

Is this simply the age-old sampling in a new bottle or is it an innovative way of wooing consumers. Narayan Devanathan, national planning head, Dentsu Marcom, says, “It’s what brands have been doing at Pragati Maidan for decades now at the Trade Fair, the Book Fair and the Auto Expo. It’s what brands have been doing at rural haats and melas for years. What has happened is luxury products are using this concept because they have very limited avenues to showcase their products.”

That said, this also opens up opportunities for specialised firms/agencies in India. Mark Barrett, chief executive officer, Asia Pacific, of London-headquartered creative agency Imagination, says, “We focus on the reflection of a brand’s values in our styling and interior of the concept stores, brand experience centres, exhibitions and events, which are now playing a major role in brand management. Increasingly in India across sectors such as retail, automotive and technology bringing  brands to life is getting critical.”
Sensing an opportunity, a bunch of global communication agencies have now set up shop in the country to lend a helping hand to their clients to develop strong and unique creative concepts in the field of experiential marketing. Isabelle-Jasmin Roth, managing director, India, of Munich-based communications agency Avantgarde, says, “The concept of experiential marketing in India is not entirely new — a lot of companies like Mercedes Benz or Tag Heuer are already working with this concept. The main industry clusters are automotive and lifestyle, plus the fast growing luxury marketing outfits. Experiential marketing holds a strong sales proposition in terms of bringing a client as close to the brand as possible, through the interaction of all of his or her senses and emotions. The risk is if you don’t execute experiential marketing well, it kicks back strongly in a negative manner.”

It’s not just through experience zones that companies are trying to woo prospective buyers or improve their brand recall; there are events that seem to serve a similar need. Perschke of Audi India says, “We do such events with our dealers. We had a fashion show with designer Vijay Arora that showcased our products through a lifestyle experience.”
Korean consumer electronics company LG also uses events and roadshows to get close to its consumers, especially for its premium products. LK Gupta, vice-president (corporate marketing), LG India, says, “With our Experience on Wheels campaign, we took our high-end products to the doorsteps of people. With a budget of Rs 10 crore, five luxury Volvo buses will cover 150 plus cities. These are designed to look like mini apartments and aim to show how a home might look in the future. There are indoor consultants, who give advice on how to do up a home. Starting in October 2011, this campaign will run for about a year.”

Consumer contact is high on most consumer durables company’s agenda. Anirudh Dhoot , director, Videocon Group, says, “It is high on every company’s agenda because it is an exclusive platform to showcase one’s products on one’s own terms and ensure the best experience to the customer. In this industry one needs to feel and experience products to get convinced and make a decision to buy, especially so for high-end products. We frequently do ground activation, such as mall activity, mobile experience zones for LCD/LED TVs and high-end washing machines, side-by-side refrigerators, microwaves etc.”

Smart phone leader Samsung has unveiled a similar initiative. “Samsung Smartphone Cafe is a retail initiative that we started last year wherein we sell and display smartphones, tablets and laptops. Samsung product consultants at the Smartphone Cafes and Plazas demonstrate the products like flat panel TVs (3D, LED, LCD), home theatre systems, digital cameras, refrigerators, washing machines, microwave ovens, A/Cs, tablets, smartphones and printers — all displayed in an uncluttered shopping environment. The product display is interactive and aimed to engage the customers better,” says a company spokesperson.

The idea of offering the experience first seems to be catching on with real-estate developers like Ashiana Housing. It has something like a trial home which gives the prospective buyer a clear idea of the floor area, specifications, facilities and services. People can come and choose to stay for a week or a month before deciding to buy a flat. You have to pay a price for this but that’s just a token amount, insists Ankur Gupta, joint managing director, Ashiana Housing. “The idea behind trial apartments is to give customers a first-hand experience,” he says. “At one of our properties we have had 90 per cent conversion, which includes customers who have taken a unit on rent as well as those who have purchased a unit after staying in a trial apartment. We hope this ratio will increase as people become aware about this concept.”

The article talks about how companies could strengthen their Employee Engagement programs by broadening their focus to Enablement and Energizing of the workforce as well. It also shares insights about what truly differentiates Leadership Practices and People Experiences in high-performing high-engagement organisations.

Unfortunately, the magazine doesn’t have an online edition. So, here is a scanned copy and better still, here is a much more readable PDF.

Enjoy! And do share you comments.

PRITAM SENGUPTA in New Delhi and KEERTHI PRATIPATI in Hyderabad write: Media criticism in India, especially in the so-called mainstream media, has never been much to write home about.

Operating on the principle that writing on another media house or media professional means exposing yourself to the same danger in the future, proprietors, promoters and editors—most of whom have plenty to hide—are wary of taking on their colleagues, competitors and compatriots.

That risk-averse attitude amounting to a mutually agreed ceasefire pretty much explains why the biggest media deal of the decade—Reliance Industries Limited (RIL) funding Network 18/ TV 18 group to pick up ETV—has been reported with about as much excitement as a weather report.

That the newspaper which issues P. Sainath‘s monthly cheque, The Hindu, declined to publish media critic Sevanti Ninan‘s fortnightly column on market rumours about the impending deal (without telling readers why) provides a chilling preview of what lies in store as the shadow of corporates lengthens over the media.

In 2008, New York Times‘ columnist Anand Giridharadas wrote of why the Indian media does not take on the Ambanis of Reliance Industries in an article titled “Indian to the core, and an oligarch“.

“A prominent Indian editor, formerly of The Times of India, who requested anonymity because of concerns about upsetting Mr Ambani, says Reliance maintains good relationships with newspaper owners; editors, in turn, fear investigating it too closely.

“I don’t think anyone else comes close to it,” the editor said of Reliance’s sway. “I don’t think anyone is able to work the system as they can.”

***

First things first, the RIL-Network18/TV18-ETV wedding is an unlikely menage-a-trois.

Reliance Industries Limited is a behemoth built by Dhirubhai Ambani and his sons Mukesh Ambani and Anil Ambani using a maze of companies and subsidiaries built on a heady cocktail of mergers and demergers, using shares, debentures, bonuses and other tricks in the accounting book—and many beyond it.

The only known interest of the Ambanis in the media before this deal was when they bought a Bombay business weekly called Commerce and turned into the daily Business & Political Observer (BPO) to match the weekly offering, The Sunday Observer, which they had acquired from Jaico Publishing.

(Top business commentators like John Elliott and Sucheta Dalal have alluded to a blog item to convey that Mukesh Ambani’s media interest goes beyond the recent announcement.)

Anyway, BPO, launched under the editorship of Prem Shankar Jha, was long in coming unlike typical Reliance projects. Suffice it to say that in 1991, when India was at the cusp of pathbreaking reforms, some of India’s biggest names in business journalism were producing dummy editions of BPO.

The Ambani publications were under the gaze of the more media-savvy younger brother, Anil Ambani, who operated with R.K. Mishra, the late editor of The Patriot, as chairman of the editorial board. The Observer group shuttered before the beginning of the new millennium.

As Mani Ratnam‘s film Guru based on Sydney Morning Herald foreign editor Hamish McDonald‘s book The Polyester Prince makes clear, the Ambanis have always cultivated friends across the political divide, but they have been identified with the Congress more than the BJP.

Raghav Bahl‘s Network18/TV18 is in some senses an ideal fit for RIL.

Till its latest cleanup came about a year and a half ago, it was difficult to understand which of its myriad companies and subsidiaries came under which arm. It too has friends on either side, but suffice it to say, CNN-IBN‘s decision not to run the cash-for-votes sting operation in July 2008 revealed where its political predilections lay.

Eenadu and ETV, on the other hand, is a long, different story.

***

The ETV network of channels was launched by Ramoji Rao, the founder of the Telugu daily Eenadu. Rao has many claims to fame (including launching Priya pickles), but he is chiefly known as the media baron behind the transformation of the Telugu film star N.T. Rama Rao into a weighty non-Congress politician.

Rao and his men are known to have crafted speeches that tapped into dormant Telugu pride for the politically naive NTR. The massive media buildup in Eenadu—Ramoji Rao pioneered multi-edition newspapers with localised supplements—saw NTR become the chief minister of Andhra Pradesh just nine months after launching the Telugu Desam Party (TDP) in 1982.

Two years later, when NTR was removed from office by a pliant governor (Ram Lal) working at the behest of Indira Gandhi‘s rampaging government, Ramoji Rao played a key role in protecting the numbers of TDP MLAs by having them packed off to Bangalore and Mysore, and building public opinion through his newspapers.

When NTR’s son-in-law N. Chandrababu Naidu walked out of TDP to “save” TDP, Ramoji Rao backed Naidu and played a hand in his ascension as CM. Thus, Ramoji Rao galvanised non-Congress forces in the South leading to the creation of the National Front, which installed V.P. Singh as PM in 1989 after the Bofors scandal claimed Rajiv Gandhi.

In 2006, Ramoji Rao placed his political leaning on record:

“I submit that until 1983 the Congress was running the State in an unchallenged and unilateral manner for the past 30 years. The Congress party became a threat to democracy and in view of the single party and individual rule by Indira Congress, the opposition in the state was in emaciated condition. It has been reduced to the status of a nominal entity. The dictatorial rule of the Congress proceeding without any hindrance. I submit that as the opposition parties were weak and were in helpless situation where they were unable to do any thing in spite of the misrule by the ruling party, Eenadu played the role of opposition. I submit that in the elections of the State Assembly held in 1983, the Congress for the first time did not secure a majority in the elections and lost the power to the newly formed Telugu Desam Party. I submit that on the day of poling i.e. January 5, 1983, I issued a signed editorial on the front page of Eenadu supporting the manifesto of Telugu Desam Party and calling on the electorate to vote for Telugu Desam Party giving cogent reasons for the stance taken by me.”

In short, the marriage between RIL-Network18/TV18 and Ramoji Rao is one between a largely pro-Congress duo and a distinctly non-Congress one.

***

Indeed, Ramoji Rao’s troubles that has resulted in substantial sections of his ETV network getting out of his grasp and into RIL’s, are largely because of his consistently anti-Congress stance, which gained an added edge in 2005 when the Congress under Y.S. Rajasekhar Reddy (YSR) trumped the TDP under Chandrababu Naidu in the assembly elections.

Reported The Telegraph:

A slew of news reports in Eenadu and programmes on ETV since 2005 have accused Congress ministers, politicians and senior government officials of corruption and hanky panky. One report, for instance, debunked the official claim that the number of suicides by farmers had dropped. Another attacked construction by Y.S. Vivekananda Reddy, the chief minister’s brother, on disputed land. A third said that Eenadu had discovered, based on a survey, that voter lists for elections for local bodies had omitted the names of opposition party sympathisers.

It didn’t take long for YSR to hit back.

It was a two-pronged attack: his son Y.S. Jagan Mohan Reddy launched a project to own launch his own newspaper and newschannel house to take on the might of Eenadu and ETV. Simultaneously, a Congress MP from Rajahmundry attacked Ramoji Rao where it hurt most: his finances.

Arun Kumar Vundavalli, the MP, revealed that Rao’s Margadarsi Financiers had started dilly-dallying about repaying depositors, even after their deposit period had expired. Kumar showed that Margadarsi Financiers—a Hindu Undivided Family (HUF) company, of which the karta was Ramoji Rao—had collected deposits from the public, although a 1997 RBI law forbade HUFs from doing so.

Margadarsi Financiers owned a 95% stake in Ushodaya Enterprises, Ramoji Rao’s company which owned Eenadu and ETV.

A one-man committee of enquiry constituted by the Y.S. Rajasekhara Reddy government revealed that Rs 2,600 crore of money was collected from the public in violation of RBI norms. Although his companies were not in great shape, Ramoji Rao assured the Andhra Pradesh high court that he would repay the full amount of Rs 2,600 crore due to the depositors.

Enter Blackstone.

In January 2007, the world’s largest private equity player indicated that it wanted to pick up 26% in Ushodaya Enterprises group for Rs 1,217 crore. At the time, it was reported to be India’s single largest foreign direct investment (FDI) in the print media.

The Blackstone offer placed the value of Ramoji Rao’s company at Rs 4,470 crore.

But the FDI proposal got stuck in the I&B ministry for months, allegedly at the behest of Vundavalli, who raised a variety of concerns over the Blackstone-Eenadu deal. In January 2008, when the clearance for the Blackstone investment was still not coming, Mint asked:

“Does the promoter of an Indian company, who is selling a stake in his family’s media firm to a foreign investor, have the right to do what he wants with that money, in this particular case, pay off liabilities of another company that his family separately also owns?….”

“FIPB records then show that the finance ministry, specifically citing Vundavalli’s claims, ‘has observed that prima facie, it appears that the purpose of securing funds from M/s Blackstone is not for advancing the business of Ushodaya Enterprises Ltd, but for repaying the deposits taken by M/s Margadarsi Financiers.”

When the Blackstone deal did not materialise, Nimesh Kampani of JM Financial stepped in as Ramoji Rao’s white knight although, as Sucheta Dalal writes, Kampani was never known to have any interest in the media except in deal-making.

According to VC Circle, Kampani picked up 21% of Ushodaya Enterprises for Rs 1,424 crore, which valued the company at Rs 6,780 crore, or over 50 per cent more than what Blackstone was willing to accept.

“The first public report of Kampani’s investment came in early February 2008, or around 10 days after stock markets crashed globally.”

Now, YSR got after Kampani.

Andhra Pradesh police issued a “look-out” notice for Kampani. Nagarjuna Finance, of which Kampani had been director, had allegedly defrauded depositors. Although Kampani had resigned from the independent directorship of the company nine years earlier, it was a sufficient handle to beat him with.

For months, Kampani had to stay out of India, fearing arrest. It was only after his bete noire YSR met with a bloody death in a helicopter crash in September 2009 that Kampani could return home.(YSR’s death in the aircrash was itself not without controversy involving the Ambanis.)

In May 2010, rumours surfaced of Mukesh Ambani buying up JM Financial but they soon fizzled out.

Shortly before buying into ETV, Kampani had recently sold his stake in a joint venture with Morgan Stanley to his foreign partner for $440 million and had the cash. The Margadarsi bailout, it was assumed, was in his personal capacity. It took a petition in 2011 filed by YSR’s widow seeking an inquiry into Chandrababu Naidu’s assets assets for the penny to drop.

Enter RIL.

YSR’s widow, Y.S. Vijayalakshmi, an MLA, alleged that when gas reserves were found in the Krishna Godavari basin in Andhra Pradesh in 2002, the Chandrababu Naidu government wilfully surrendered its right over the discovery in favour of Reliance, “while allowing Naidu’s close associate Ramoji Rao to be the vehicle of the quid pro quo.” (page 32)

“In consideration for the favour done by the Respondent No. 8 (Chandrababu Naidu) in allowing the State’s KG basin claim to be brushed under the carpet, the Reliance group facilitated the payout of Ramoji Rao’s debts to his depositors. This was carried out through known associates and friends of Mukesh Ambani.

“Two of these known associates of Ambani and the Reliance Group are Nimesh Kampani (of JM Financial) and Vinay Chajlani (of Nai Duniya).

“Kampani extended himself in ensuring that Ramoji Rao would be bailed out. Within a short span of 37 days between December 2007 and January 2008, six “shell companies” were floated on three addresses, which are shown as Sriram Mills Compound, Worli, which is the official address of Reliance Industries Limited. Reliance diverted Rs 2,604 crores of its shareholders money through the shell companies to M/s Kampani’s Equator Trading India Limited and Chajlani’s Anu Trading.”

In other words, RIL’s involvement in Eenadu through Kampani became known only recently in response to Vijayalakshmi’s petition, but it was market gossip for quite a while.

T.N. Ninan, the chairman of Business Standard and the president of the editors’ guild of India, wrote in a column in January 2011:

“If reports in Jagan Reddy’s Saakshi newspaper are to be believed, Mukesh Ambani is a behind-the-scenes investor in Eenadu, the leading Telugu daily.”

Vijayalakshmi’s 2011 petition makes several serious allegations.

That Ramoji Rao entered into the deal with Kampani’s Equator just 23 days after it was registered although it had no known expertise or business; that Ushodaya sold Rs 100 shares to Equator at a premium of Rs 5,28,630 per share; and that Ushodaya’s valuation had been pumped up by Rs 1,200 crore by its claims over a movie library.

Vijayalakshmi’s petition concluded:

“The interest shown by Reliance group in coming to the rescue of Ushodaya Enterprises headed by Ramoji Rao is clearly in defiance of any prudent profit-based corporate entity (since) Reliance does not gain any returns by virtue of that investment.”

***

It is this RIL baby that is now in Network18/TV18′s lap.

The timing of the RIL-Network18/TV18-ETV deal also hides a small story.

It comes when the probe into the assets of Naidu and his associates (including Ramoji Rao) has moved from the High Court to the Supreme Court. It comes when a parallel probe into Vijayalakshmi’s son Jagan Mohan Reddy’s assets has entered a new and critical phase. It comes when the KG basin gas controversy is heating up. And, above all, it comes when 2014 is looming into the calendar.

Several questions emerge from this deal which has politics, business and media in varying measures:

1) What does it mean for Indian democracy when India’s richest businessman becomes India’s biggest media baron with control over at least two dozen English and regional news and business channels?

2) What kind of control will Mukesh Ambani have over Raghav Bahl’s Network18/TV18 when and if RIL’s optionally convertible debentures (OCDs) are turned into equity?

3) What kind of due diligence did the financially troubled Network18/TV18 do on the Kampani-Ambani investment in ETV before agreeing to pick up RIL’s stake for Rs 2,100 crore?

4) How will CNBC-TV18, which incidentally broke the news of the split among the Ambani brothers in 2005, report news of India’s biggest company (or its political and other benefactors) now that it is indirectly going to be owned by it?

5) Is there a case for alarm when one man has a direct and indirect stamp over three of the five major English news channels (CNN-IBN, NewsX and NDTV 24×7), three business channels (CNBC-TV18, IBN Awaaz, NDTV Profit), and at least five Hindi news channels?

6) Do Raghav Bahl and team who ran a handful of channels heavily into debt, have the expertise to run two dozen or more channels, especially in the language space where there are bigger players like Star and Zee?

7) Is the ETV network really worth so much, especially when Ushodaya’s most profitable parts, Eenadu and Priya Foods, are out of it? Or is RIL using Network18/TV18′s plight to turn a bad asset into a good one?

8) Is RIL really tying with Network18/TV18 with 4G in mind, or is this just spin to push an audacious deal past market regulators such as SEBI and the Competition Commission of India (CCI)?

9) How immune are Mukesh Ambani and Raghav Bahl from political forces hoping to use the combined clout of RIL-Network18/TV18 to blunt negative coverage ahead of the 2014 general elections?

10) And have Network18/TV18 investors got a fair deal?

***

Infographic: courtesy Outlook

Also read: The sudden rise of Mukesh Ambani, media mogul

The Indian Express, Reliance & Shekhar Gupta

Niira Radia, Mukesh Ambani, Prannoy Roy & NDTV

PRITAM SENGUPTA in New Delhi and KEERTHI PRATIPATI in Hyderabad write: Media criticism in India, especially in the so-called mainstream media, has never been much to write home about.

Operating on the principle that writing on another media house or media professional means exposing yourself to the same danger in the future, proprietors, promoters and editors—most of whom have plenty to hide—are wary of taking on their colleagues, competitors and compatriots.

That risk-averse attitude amounting to a mutually agreed ceasefire pretty much explains why the biggest media deal of the decade—Reliance Industries Limited (RIL) funding Network 18/ TV 18 group to pick up ETV—has been reported with about as much excitement as a weather report.

That the newspaper which issues P. Sainath‘s monthly cheque, The Hindu, declined to publish media critic Sevanti Ninan‘s fortnightly column on market rumours about the impending deal (without telling readers why) provides a chilling preview of what lies in store as the shadow of corporates lengthens over the media.

In 2008, New York Times‘ columnist Anand Giridharadas wrote of why the Indian media does not take on the Ambanis of Reliance Industries in an article titled “Indian to the core, and an oligarch“.

“A prominent Indian editor, formerly of The Times of India, who requested anonymity because of concerns about upsetting Mr Ambani, says Reliance maintains good relationships with newspaper owners; editors, in turn, fear investigating it too closely.

“I don’t think anyone else comes close to it,” the editor said of Reliance’s sway. “I don’t think anyone is able to work the system as they can.”

***

First things first, the RIL-Network18/TV18-ETV wedding is an unlikely menage-a-trois.

Reliance Industries Limited is a behemoth built by Dhirubhai Ambani and his sons Mukesh Ambani and Anil Ambani using a maze of companies and subsidiaries built on a heady cocktail of mergers and demergers, using shares, debentures, bonuses and other tricks in the accounting book—and many beyond it.

The only known interest of the Ambanis in the media before this deal was when they bought a Bombay business weekly called Commerce and turned into the daily Business & Political Observer (BPO) to match the weekly offering, The Sunday Observer, which they had acquired from Jaico Publishing.

(Top business commentators like John Elliott and Sucheta Dalal have alluded to a blog item to convey that Mukesh Ambani’s media interest goes beyond the recent announcement.)

Anyway, BPO, launched under the editorship of Prem Shankar Jha, was long in coming unlike typical Reliance projects. Suffice it to say that in 1991, when India was at the cusp of pathbreaking reforms, some of India’s biggest names in business journalism were producing dummy editions of BPO.

The Ambani publications were under the gaze of the more media-savvy younger brother, Anil Ambani, who operated with R.K. Mishra, the late editor of The Patriot, as chairman of the editorial board. The Observer group shuttered before the beginning of the new millennium.

As Mani Ratnam‘s film Guru based on Sydney Morning Herald foreign editor Hamish McDonald‘s book The Polyester Prince makes clear, the Ambanis have always cultivated friends across the political divide, but they have been identified with the Congress more than the BJP.

Raghav Bahl‘s Network18/TV18 is in some senses an ideal fit for RIL.

Till its latest cleanup came about a year and a half ago, it was difficult to understand which of its myriad companies and subsidiaries came under which arm. It too has friends on either side, but suffice it to say, CNN-IBN‘s decision not to run the cash-for-votes sting operation in July 2008 revealed where its political predilections lay.

Eenadu and ETV, on the other hand, is a long, different story.

***

The ETV network of channels was launched by Ramoji Rao, the founder of the Telugu daily Eenadu. Rao has many claims to fame (including launching Priya pickles), but he is chiefly known as the media baron behind the transformation of the Telugu film star N.T. Rama Rao into a weighty non-Congress politician.

Rao and his men are known to have crafted speeches that tapped into dormant Telugu pride for the politically naive NTR. The massive media buildup in Eenadu—Ramoji Rao pioneered multi-edition newspapers with localised supplements—saw NTR become the chief minister of Andhra Pradesh just nine months after launching the Telugu Desam Party (TDP) in 1982.

Two years later, when NTR was removed from office by a pliant governor (Ram Lal) working at the behest of Indira Gandhi‘s rampaging government, Ramoji Rao played a key role in protecting the numbers of TDP MLAs by having them packed off to Bangalore and Mysore, and building public opinion through his newspapers.

When NTR’s son-in-law N. Chandrababu Naidu walked out of TDP to “save” TDP, Ramoji Rao backed Naidu and played a hand in his ascension as CM. Thus, Ramoji Rao galvanised non-Congress forces in the South leading to the creation of the National Front, which installed V.P. Singh as PM in 1989 after the Bofors scandal claimed Rajiv Gandhi.

In 2006, Ramoji Rao placed his political leaning on record:

“I submit that until 1983 the Congress was running the State in an unchallenged and unilateral manner for the past 30 years. The Congress party became a threat to democracy and in view of the single party and individual rule by Indira Congress, the opposition in the state was in emaciated condition. It has been reduced to the status of a nominal entity. The dictatorial rule of the Congress proceeding without any hindrance. I submit that as the opposition parties were weak and were in helpless situation where they were unable to do any thing in spite of the misrule by the ruling party, Eenadu played the role of opposition. I submit that in the elections of the State Assembly held in 1983, the Congress for the first time did not secure a majority in the elections and lost the power to the newly formed Telugu Desam Party. I submit that on the day of poling i.e. January 5, 1983, I issued a signed editorial on the front page of Eenadu supporting the manifesto of Telugu Desam Party and calling on the electorate to vote for Telugu Desam Party giving cogent reasons for the stance taken by me.”

In short, the marriage between RIL-Network18/TV18 and Ramoji Rao is one between a largely pro-Congress duo and a distinctly non-Congress one.

***

Indeed, Ramoji Rao’s troubles that has resulted in substantial sections of his ETV network getting out of his grasp and into RIL’s, are largely because of his consistently anti-Congress stance, which gained an added edge in 2005 when the Congress under Y.S. Rajasekhar Reddy (YSR) trumped the TDP under Chandrababu Naidu in the assembly elections.

Reported The Telegraph:

A slew of news reports in Eenadu and programmes on ETV since 2005 have accused Congress ministers, politicians and senior government officials of corruption and hanky panky. One report, for instance, debunked the official claim that the number of suicides by farmers had dropped. Another attacked construction by Y.S. Vivekananda Reddy, the chief minister’s brother, on disputed land. A third said that Eenadu had discovered, based on a survey, that voter lists for elections for local bodies had omitted the names of opposition party sympathisers.

It didn’t take long for YSR to hit back.

It was a two-pronged attack: his son Y.S. Jagan Mohan Reddy launched a project to own launch his own newspaper and newschannel house to take on the might of Eenadu and ETV. Simultaneously, a Congress MP from Rajahmundry attacked Ramoji Rao where it hurt most: his finances.

Arun Kumar Vundavalli, the MP, revealed that Rao’s Margadarsi Financiers had started dilly-dallying about repaying depositors, even after their deposit period had expired. Kumar showed that Margadarsi Financiers—a Hindu Undivided Family (HUF) company, of which the karta was Ramoji Rao—had collected deposits from the public, although a 1997 RBI law forbade HUFs from doing so.

Margadarsi Financiers owned a 95% stake in Ushodaya Enterprises, Ramoji Rao’s company which owned Eenadu and ETV.

A one-man committee of enquiry constituted by the Y.S. Rajasekhara Reddy government revealed that Rs 2,600 crore of money was collected from the public in violation of RBI norms. Although his companies were not in great shape, Ramoji Rao assured the Andhra Pradesh high court that he would repay the full amount of Rs 2,600 crore due to the depositors.

Enter Blackstone.

In January 2007, the world’s largest private equity player indicated that it wanted to pick up 26% in Ushodaya Enterprises group for Rs 1,217 crore. At the time, it was reported to be India’s single largest foreign direct investment (FDI) in the print media.

The Blackstone offer placed the value of Ramoji Rao’s company at Rs 4,470 crore.

But the FDI proposal got stuck in the I&B ministry for months, allegedly at the behest of Vundavalli, who raised a variety of concerns over the Blackstone-Eenadu deal. In January 2008, when the clearance for the Blackstone investment was still not coming, Mint asked:

“Does the promoter of an Indian company, who is selling a stake in his family’s media firm to a foreign investor, have the right to do what he wants with that money, in this particular case, pay off liabilities of another company that his family separately also owns?….”

“FIPB records then show that the finance ministry, specifically citing Vundavalli’s claims, ‘has observed that prima facie, it appears that the purpose of securing funds from M/s Blackstone is not for advancing the business of Ushodaya Enterprises Ltd, but for repaying the deposits taken by M/s Margadarsi Financiers.”

When the Blackstone deal did not materialise, Nimesh Kampani of JM Financial stepped in as Ramoji Rao’s white knight although, as Sucheta Dalal writes, Kampani was never known to have any interest in the media except in deal-making.

According to VC Circle, Kampani picked up 21% of Ushodaya Enterprises for Rs 1,424 crore, which valued the company at Rs 6,780 crore, or over 50 per cent more than what Blackstone was willing to accept.

“The first public report of Kampani’s investment came in early February 2008, or around 10 days after stock markets crashed globally.”

Now, YSR got after Kampani.

Andhra Pradesh police issued a “look-out” notice for Kampani. Nagarjuna Finance, of which Kampani had been director, had allegedly defrauded depositors. Although Kampani had resigned from the independent directorship of the company nine years earlier, it was a sufficient handle to beat him with.

For months, Kampani had to stay out of India, fearing arrest. It was only after his bete noire YSR met with a bloody death in a helicopter crash in September 2009 that Kampani could return home. In May 2010, rumours surfaced of Mukesh Ambani buying up JM Financial but they soon fizzled out.

Shortly before buying into ETV, Kampani had recently sold his stake in a joint venture with Morgan Stanley to his foreign partner for $440 million and had the cash. The Margadarsi bailout, it was assumed, was in his personal capacity. It took a petition in 2011 filed by YSR’s widow seeking an inquiry into Chandrababu Naidu’s assets assets for the penny to drop.

Enter RIL.

YSR’s widow, Y.S. Vijayalakshmi, an MLA, alleged that when gas reserves were found in the Krishna Godavari basin in Andhra Pradesh in 2002, the Chandrababu Naidu government wilfully surrendered its right over the discovery in favour of Reliance, “while allowing Naidu’s close associate Ramoji Rao to be the vehicle of the quid pro quo.” (page 32)

“In consideration for the favour done by the Respondent No. 8 (Chandrababu Naidu) in allowing the State’s KG basin claim to be brushed under the carpet, the Reliance group facilitated the payout of Ramoji Rao’s debts to his depositors. This was carried out through known associates and friends of Mukesh Ambani.

“Two of these known associates of Ambani and the Reliance Group are Nimesh Kampani (of JM Financial) and Vinay Chajlani (of Nai Duniya).

“Kampani extended himself in ensuring that Ramoji Rao would be bailed out. Within a short span of 37 days between December 2007 and January 2008, six “shell companies” were floated on three addresses, which are shown as Sriram Mills Compound, Worli, which is the official address of Reliance Industries Limited. Reliance diverted Rs 2,604 crores of its shareholders money through the shell companies to M/s Kampani’s Equator Trading India Limited and Chajlani’s Anu Trading.”

In other words, RIL’s involvement in Eenadu through Kampani became known only recently in response to Vijayalakshmi’s petition, but it was market gossip for quite a while.

T.N. Ninan, the chairman of Business Standard and the president of the editors’ guild of India, wrote in a column in January 2011:

“If reports in Jagan Reddy’s Saakshi newspaper are to be believed, Mukesh Ambani is a behind-the-scenes investor in Eenadu, the leading Telugu daily.”

Vijayalakshmi’s 2011 petition makes several serious allegations.

That Ramoji Rao entered into the deal with Kampani’s Equator just 23 days after it was registered although it had no known expertise or business; that Ushodaya sold Rs 100 shares to Equator at a premium of Rs 5,28,630 per share; and that Ushodaya’s valuation had been pumped up by Rs 1,200 crore by its claims over a movie library.

Vijayalakshmi’s petition concluded:

“The interest shown by Reliance group in coming to the rescue of Ushodaya Enterprises headed by Ramoji Rao is clearly in defiance of any prudent profit-based corporate entity (since) Reliance does not gain any returns by virtue of that investment.”

***

It is this RIL baby that is now in Network18/TV18′s lap.

The timing of the RIL-Network18/TV18-ETV deal also hides a small story.

It comes when the probe into the assets of Naidu and his associates (including Ramoji Rao) has moved from the High Court to the Supreme Court. It comes when a parallel probe into Vijayalakshmi’s son Jagan Mohan Reddy’s assets has entered a new and critical phase. It comes when the KG basin gas controversy is heating up. And, above all, it comes when 2014 is looming into the calendar.

Several questions emerge from this deal which has politics, business and media in varying measures:

1) What does it mean for Indian democracy when India’s richest businessman becomes India’s biggest media baron with control over at least two dozen English and regional news and business channels?

2) What kind of control will Mukesh Ambani have over Raghav Bahl’s Network18/TV18 when and if RIL’s optionally convertible debentures (OCDs) are turned into equity?

3) What kind of due diligence did the financially troubled Network18/TV18 do on the Kampani-Ambani investment in ETV before agreeing to pick up RIL’s stake for Rs 2,100 crore?

4) How will CNBC-TV18, which incidentally broke the news of the split among the Ambani brothers in 2005, report news of India’s biggest company (or its political and other benefactors) now that it is indirectly going to be owned by it?

5) Is there a case for alarm when one man has a direct and indirect stamp over three of the five major English news channels (CNN-IBN, NewsX and NDTV 24×7), three business channels (CNBC-TV18, IBN Awaaz, NDTV Profit), and at least five Hindi news channels?

6) Do Raghav Bahl and team who ran a handful of channels heavily into debt, have the expertise to run two dozen or more channels, especially in the language space where there are bigger players like Star and Zee?

7) Is the ETV network really worth so much, especially when Ushodaya’s most profitable parts, Eenadu and Priya Foods, are out of it? Or is RIL using Network18/TV18′s plight to turn a bad asset into a good one?

8) Is RIL really tying with Network18/TV18 with 4G in mind, or is this just spin to push an audacious deal past market regulators such as SEBI and the Competition Commission of India (CCI)?

9) How immune are Mukesh Ambani and Raghav Bahl from political forces hoping to use the combined clout of RIL-Network18/TV18 to blunt negative coverage ahead of the 2014 general elections?

10) And have Network18/TV18 investors got a fair deal?

***

Infographic: courtesy Outlook

Also read: The sudden rise of Mukesh Ambani, media mogul

The Indian Express, Reliance & Shekhar Gupta

Niira Radia, Mukesh Ambani, Prannoy Roy & NDTV

Read More http://www.business-standard.com/india/news/the-artplacement-cash-undertable/461103/

Source: Business Standard

Read More http://business-standard.com/india/news/software-product-start-ups-relysmaller-cities/460478/

Source: Business Standard

Mukesh Ambani (left) went to sleep last night as India’s richest man and woke up this morning as also India’s biggest media mogul. That, in a nutshell, is the sum and substance of the dramatic announcement by Reliance Industries Limited (RIL) that it was getting into a tie-up with Raghav Bahl‘s Network18.

The tie-up means an RIL subsidiary will pump funds into a rights issue by Bahl’s Network18 that is deep in the red. This will help the latter pare down its debts and it will also help it pick up RIL’s stake in the Eenadu Television (ETV) channels owned by southern media strongman, Ramoji Rao.

Although RIL has said the investment will be done by way of an independent trust and that Raghav Bahl and team will have full control, in effect, it means overnight Mukesh Ambani’s direct and indirect shadow will be over at least three English news channels (CNN-IBN, NDTV, NewsX), a top flight business news channel (CNBC TV18), and a clutch of language channels.

With younger brother Anil Ambani too reported to be in the media in ways unseen and unreportable, and with the two warring brothers doing a recent jig together, the RIL-Network 18 tieup raises troubling questions over the hold of India’s biggest corporate house on the media and the potential for the creation of a media duopoly.

Today’s RIL announcement of a tie-up with Network 18 confirms a Business Standard story last month and makes nonsense of a Times of India story the following day that Rajeev Chandrasekhar was picking the ETV channels. The announcement also confirms a Wall Street Journal report which had been vehemently denied by RIL.

The only official previous RIL involvement with the media was when it bought the Sunday Observer and launched the Business and Political Observer in 1991. Both those ventures were soon shut.

Below is the full text of the RIL press release:

***

MUMBAI, 3 January 2012: RIL today announced that a part of the interest owned by it in the ETV Channels is being divested to TV18 Broadcast Limited (TV18). As a part of the deal, Infotel Broad Band Services Limited (“Infotel”), a subsidiary of RIL, has entered into a Memorandum of Understanding with TV18 and Network18 Media and Investments Limited (Network18) for preferential access to all their content for distribution through the 4G Broadband Network being set up by it.

As per the Memorandum of Understanding, Infotel shall have preferential access to (i) the content of all the media and web properties of Network 18 and its associates and (ii) programming and digital content of all the broadcasting channels of TV18 and its associates on a first right basis as a most preferred customer.

Infotel is setting up a pan India world class 4^th Generation Broadband Network using state of the art technologies. Infotel expects to take a leadership position in content distribution through broadband technology through a host of devices. Digital content from entertainment, news, sports, music, weather, education and other genres will be a key driver to increase consumption of broadband.

RIL, through investments of about Rs.2600 crores, by its group companies, currently holds interest in various ETV Channels being operated and managed by Eenadu Group viz. (i) 100% economic interest in regional news channels, namely ETV Uttar Pradesh, ETV Madhya Pradesh, ETV Rajasthan, ETV Bihar and ETV Urdu channel (“News Channels”) (ii) 100% economic interest in ETV Marathi, ETV Kannada, ETV Bangla, ETV Gujarati and ETV Oriya (“Entertainment Channels”) and (iii) 49% economic interest in ETV Telugu and ETV Telugu News (“Telugu Channels”).

A part of the above investments comprising of 100% interest in News Channels, 50% interest in Entertainment Channels and 24.50% interest in Telugu Channels is being profitably divested to TV18 Broadcast Limited.

Network18 and TV18 have today announced that both the companies are raising funds for the acquisition of ETV Channels through a Rights Issue.

Independent Media Trust (“Trust”), a trust set up for the benefit of Reliance Industries Limited, has agreed to fund the Promoters of Network 18 and TV18 to enable them to subscribe to the proposed Rights Issue announced by both the companies today. The Promoter Companies of Network18 and TV18 and the Trust have entered into a Term Sheet under which the Trust would be subscribing to the Optionally Convertible Debentures to be issued by the Promoter Companies.

Reliance will leverage its deep understanding of the Indian markets – consumer insights, technological expertise, and the ability to build & manage scale – to make this a “win win” partnership. This will create value and be accretive to the shareholders of RIL.

Raghav Bahl and his team will continue to have full operational and management control of both the companies. Raghav Bahl and the current Promoter Entities of Network18 and TV18 will continue to retain control over Network 18 and TV18. RIL reposes full faith in the current leadership and management team of Network18 and TV18.

The investments in these media properties are being made by RIL through an independent trust which will have eminent individuals as Trustees, thus preserving the management, operational and editorial independence of these media companies.

The investment by the Trust in the Promoter Companies of Network18 and TV18, and the arrangement between Network18/TV18 and Infotel for the acquisition and distribution of content on the Infotel platform, is one of many such partnership initiatives being undertaken by Infotel.

The combination of India’s leading TV content provider, with a bouquet of nearly 25 channels, and Infotel, will be a significant step in bringing a high quality “live TV” experience to broadband customers across the country. Likewise, Network18’s market-leading web portals and e-commerce operations will provide several value added services to Infotel’s broadband subscribers. This unique alliance is expected to differentiate Infotel and create value for all stakeholders.

External reading: The column The Hindu didn’t publish

Medianama on the RIL-Network 18 deal

***

Also read: Why the Indian media doesn’t take on the Ambanis

The Indian Express, Reliance & Shekhar Gupta

Niira Radia, Mukesh Ambani, Prannoy Roy & NDTV

Read More: http://www.business-standard.com/india/news/india-inc-to-go-slowhiring-in-2012/459978/

Source: Business Standard