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Rediff.com  » Business » RIL is not instrumental in top deck exits at Network18: Bahl

RIL is not instrumental in top deck exits at Network18: Bahl

July 25, 2014 14:45 IST

RIL is not instrumental in top deck exits at Network18: Bahl

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On July 7, Reliance Industries announced a new board for the Rs 2692-crore  (Rs 26.92 billion )Network18, a media conglomerate it took management control of in May this year following a financial bailout in early 2012.

On July 8, Business Standard carried a piece title ‘What legacy does Raghav Bahl Leave Behind?' on the man who founded Network18 and ran it for over two decades.

While Bahl had initially declined to speak, he has now responded to the many issues raised in the

article. Here is an edited version of Raghav Bahl's (see left) take on many of those issues.

On Haresh Chawla quitting because of the Reliance deal

One of the most enduring myths perpetrated in media reports is that "Haresh left because he did not agree with the terms of the Reliance deal".

The fact is that Haresh decided to leave in the first half of 2011; it was a "natural end" to a long innings.

He felt the need to move on, I agreed, and that was that.

It was early in 2011.

The Reliance deal was nowhere in the line of sight, so he simply could not have objected to it (Haresh would happily confirm this.

I also have a full mail trail which will bear this out).

We agreed that he will take six months to close things out and groom Sai (Kumar, who became group CEO later) as his successor.

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Photographs: Vivek Prakash/Reuters

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On Network18's complicated corporate structure and "accounting ethics"

This is one more myth that just keeps on getting repeated without evidence.

Here are the facts. Our structure was complicated, and I am the first person to publicly acknowledge it. But the reason for that was the convergence of two outrageous government rules which trapped us in a pincer.

One, between 2004 and 2009, the government was unable to define "how to calculate indirect foreign equity."

I must have made dozens of representations to get that clarification from the ministry of information & broadcasting but got no answer.

In fact, ministry officials told me that "since there is no clarity on this matter, we will not be able to give a news broadcast licence to TV18. 

So if you want to launch new channels, you will have to do that in unrelated entities.

And that's the only reason why we were forced to keep Awaaz and CNN-IBN in separate entities.

As soon as the government clarified the definition of "indirect foreign equity" in 2009 (yes, it took nearly six years!), we reorganised the various companies into a single balance sheet.

The second government rule that trapped us was the requirement for a "single Indian shareholder to control 51 per cent of a news company."

I had no option but to device structures that ensured that I had 51 per cent control.

It was not out of some weird desire to control 51 per cent but because the law mandated it.

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Photographs: Courtesy, Network18
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On questionable accounting ethics

This one is another crazy myth that is propagated. One magazine wrote a whole article picking up disclosures from our own balance sheets but portrayed those as some kind of scoop that it had unearthed.

Everything was fully disclosed in our own balance sheets. Nothing was ever hidden. All our auditors were globally acclaimed companies.

And here's one more fact: not once over the last 21 years have we faced even a stricture (forget about a formal charge or first information report or investigation) from any regulatory authority anywhere in the world - be it the Securities & Exchange Board of India, Reserve Bank of India, the Enforcement Directorate, or under the Foreign Exchange Management Act or whatever - not even a stricture! There are very few companies in India of this size and age which can claim something like that.

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Photographs: Courtesy, Network18
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On questionable accounting ethics

This one is another crazy myth that is propagated. One magazine wrote a whole article picking up disclosures from our own balance sheets but portrayed those as some kind of scoop that it had unearthed.

Everything was fully disclosed in our own balance sheets. Nothing was ever hidden. All our auditors were globally acclaimed companies.

And here's one more fact: not once over the last 21 years have we faced even a stricture (forget about a formal charge or first information report or investigation) from any regulatory authority anywhere in the world - be it the Securities & Exchange Board of India, Reserve Bank of India, the Enforcement Directorate, or under the Foreign Exchange Management Act or whatever - not even a stricture!

There are very few companies in India of this size and age which can claim something like that.

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Photographs: Reuters
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RIL is not instrumental in top deck exits at Network18: Bahl

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On why Reliance "sidelined" Bahl

On what basis can this assertion be made? Have I said that it has sidelined me? No. Has it said that it has sidelined me? No.

So why is it so difficult to believe that I have voluntarily chosen this option; that I have, consciously and with my wits about me, decided that this exit was the best decision to take in everybody's interest? Let me explain this a bit more.

In January 2012, when we announced our transaction with Reliance, it was completely, fully and transparently disclosed (as opposed to certain other media groups which do not disclose similar transactions).

It was clear why I had taken the advances, what we would do with them, how all the voting rights were vesting in me, and how, finally, Reliance had the option to take control "at a moment's notice."

Because I was clear in my head about three things.

One, the transaction had to be fully and transparently revealed.

Two, I would stay only as long as I had unmitigated and total control over the group, which meant that I exercised the voting rights on 73 per cent of promoters' equity, without any dilution of control in any manner.

To be fair to Mr (Mukesh) Ambani, he fully honoured that commitment. 

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Photographs: Reuters

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RIL is not instrumental in top deck exits at Network18: Bahl

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Over the last two years, I had complete and unfettered control. No Reliance person was on our board or in our management or would even enter our offices.

Three, it was always clear to Mr Ambani and to me that as soon as Reliance exercised its rights to take voting control away from me, which it had the right to do at a "moment's notice," I would walk away and become a friend, philosopher and guide. There was no way that I would stay back as a "professional executive" with Mr Ambani."

And again to be fair to him, he fully understood, appreciated and endorsed the fact that "once an entrepreneur, always an entrepreneur."

This was known to both of us. Which is why there is no acrimony or bitterness at all.

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Photographs: Yannis Behrakis/Reuters

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On Reliance being angry about (KG) gas and Arvind Kejriwal coverage

As for the coverage of the Aam Aadmi Party (AAP), every newsroom in the country was passionately debating the pros and cons of this extraordinary phenomenon.

Some of my own articles in FirstPost were fairly critical of several of the things AAP did during those six months - many others were vociferous supporters.

I would often despair that the media, including ours, was transmitting AAP's allegations without putting them through a fact/truth check.

This too would be contested by many of our editors, and I am sure the same thing was happening in every newsroom.

Naturally, there were heated editorial debates, and we had our fair share of these - all very professional, normal and healthy.

You only have to go through the archives of Network18 content, whether at FirstPost, CNN-IBN or IBN7, to see that every shade of opinion was carried and given a fair exposition.

That should clearly establish our non-partisan credentials.

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Photographs: Toby Melville/Reuters

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As for Reliance, it is a fact that it publicly denied AAP's charges via blogs and videos.

It made its strong disagreement apparent to several media organisations, including Network18.

That was all there was to this issue: nothing more, nothing less and nothing exceptional for Network18. Also, there have been some wild/unsubstantiated assertions about the use of abusive/intimidatory language by Mr Manoj Modi in a call to me.

The person who makes this assertion does not wish to be identified, cannot produce a shred of written/oral/recorded/snooped evidence, yet the media plays this up as the gospel truth.

So I hope you will allow me to say that all my conversations with Mr Modi have always been dignified and mature; as two adults, we may have disagreed on several issues, but the discourse was always civil, open and accommodating.

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Photographs: Danish Siddiqui/Reuters

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On how Reliance exercised "de facto" control over the last two years

This is another myth. Two "facts" are usually trotted out in support of this assertion.

One, how some Forbes India editors were "sacked" at Reliance's instructions; but nothing could be farther from the truth here. And if you don't believe me, you simply have to ask senior editor R Jagannathan, who was in the thick of this fracas with the Forbes India editors.

He will happily confirm that various decisions were taken by Sai, him and other senior people.

Reliance was not even remotely in the picture. Two, 300 people were laid off at Reliance's insistence in 2013.

Again, this is complete untruth. This restructuring, while unfortunate for those who were at the receiving end of it, was brilliantly conceived and executed by Sai/Ajay (Chacko, COO) along with (professional services firm) EY. It actually made the company truly healthy and fighting fit. Reliance was not even remotely in the picture.

In fact, Reliance was justifiably unhappy with the fact that it had nothing to do with this stuff - it did not even have an inkling - but had to suffer the opprobrium and backlash in the media.

As for "editorial interference", I can truly say that we ran a fully empowered and independent ship.

Ask somebody like Karan Thapar, who worked with me for over a decade - not once, not even once, did I ask him to change anything. Ask Rajdeep (Sardesai). Ask Senthil. Ask Sanjay Pugalia. Ask Ashutosh. Ask anybody!

 

 


Photographs: Reuters

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