Who controls Indian news media?
For a country that prides itself on the strength of its democracy, India’s record in upholding the freedom of press has been consistently poor. Currently, India ranks an abysmal 138 out of 180 in the Press Freedom Index — the position not having changed much for over a decade.
On top of this, Indian Media was voted as #2 in most corrupt Media in the world in WEF 2017.
The sheer number of media organisations and outlets often conceals the fact there is dominance over specific markets and market segments by a few players — in other words, the markets are often oligopolistic in character. The absence of restrictions on cross-media ownership implies that particular companies or groups or conglomerates dominate markets both vertically (that is, across different media such as print, radio, television and the internet) as well as horizontally (namely, in particular geographical regions).
Political parties and persons with political affiliation own/control increasing sections of the media in India. The promoters and controllers of media groups have traditionally held interests in many other business interests and continue to do so, often using their media outlets to further these. There are a few instances of promoters who have used the profits from their media operations to diversify into other (unrelated) businesses.
Convergence of Creators and Distributers
Five Indian news media companies — NDTV, News Nation, India TV, News24 and Network18 — are either indebted to Mukesh Ambani, the richest Indian and the owner of Reliance Industries, or to Mahendra Nahata, an industrialist and associate of Ambani’s, who is also on the board of Reliance’s new telecom venture, Reliance Jio.
Through loans and investments, Ambani, Nahata and the industrialist Abhey Oswal have given the five media companies funds that range from tens to hundreds of crores of rupees. As a result, the control that the three businessmen wield over these media networks varies from 20 to over 70 percent.
The control that they exert over these groups is a function of the investments they have made through direct loans, Optionally Fully Convertible Debentures (OFCDs) — loans that can be converted into shares at the investor’s discretion — and direct ownership of shares.
The two centerpieces of this plan are Shinano Retail, a wholly owned subsidiary of Reliance, and Vishvapradhan Commercial Private Limited (VCPL). VCPL was earlier owned in part by Shinano and another Reliance subsidiary. VCPL’s directors, Ashwin Khasgiwala and Kalpana Srinivasan, were both employees of Reliance. The company was also registered under the same address as Shinano. In an affidavit submitted to the Delhi High Court in September 2015, the income tax department quoted its report from June 2011, stating that VCPL “has no business activity and is not a genuine concern.” In the financial year 2012, VCPL was sold to Infotel Televentures and Skyblue Buildwell, both of which are entities related to Nahata.
In May 2014, Reliance Industries Limited (RIL) acquired Network18 for Rs 4,000 crore. A statement on shareholding patterns that was released by Network18 on 30 September 2015 lists Shinano as one of its two promoter groups. Shinano holds 1.85 percent of Network18’s shares. This is a part of the 75 percent stake that RIL owns in Network18. In a move to leverage deeper control, in January 2018, Mukesh Ambani-owned TV18 Broadcast has decided to increase its shareholding in the equal joint venture Viacom18 Media. TV18, which currently holds 50% in the JV with US conglomerate Viacom Inc, bought additional 1% for a cash consideration of $20 million, valuing Viacom18 Media at $2 billion.
The transactions that diluted the ownership of Radhika and Prannoy Roy — the co-founders of NDTV — over their channel are slightly more complex. Between 2009 and 2010, the Roys took a loan of Rs 403.85 crore from VPCL and signed an agreement on behalf of Radhika Roy Prannoy Roy Holdings Private Limited, or RRPR — an entity that they set up in 2005, and in which they placed NDTV’s shares beginning mid-2008. The agreement gave VCPL the right to convert this loan into 99.9 percent of RRPR’s equity — effectively, complete ownership — not just during the period of the loan but even after. By the time RRPR got the loan in March 2009, its total shareholding in NDTV was 29.18 percent, and the agreement effectively sold this portion of NDTV’s shares to VCPL. In the 2012 financial year, VCPL received Rs 50 crore from Eminent Networks, a company owned by Nahata. All of these loans were interest-free and unsecured. Although the money Eminent lent to VCPL was much less than the amount that VCPL had lent to RRPR — Rs 403.85 crore — it now owns OFCDs worth the same amount with VCPL. This may also mean that Eminent has now taken over the 29.18 percent of NDTV that VCPL owned. Which entity among these indirectly controls NDTV is not clear at the moment. It is, however, certain that these transactions have resulted in the Roys losing a significant amount of control over their company.
Eminent also features in the account books of News24 — a 24-hour Hindi news channel — and E24 Glamour, an entertainment channel. Both News24 and E24 are owned by Anuradha Prasad. As of March 2014, News24 had taken a loan of Rs 12.5 crore from Eminent. This loan was taken in the form of OFCDs. According to the agreement, the OFCDs could be converted into equity at any point during a period of eight years, starting from the date on which the debentures were allotted to Eminent. The debentures were worth approximately 36 percent of News24’s paid-up capital — the amount of its capital that was funded by its shareholders. This loan had originally been given to News24 by another Nahata company, Digivision Holdings, which transferred the debentures to Eminent on 14 November 2013. As of March 2014, Eminent also lent Rs 12.5 crore to E24 Glamour in the form of OFCDs. During the 2013 financial year, E24 Glamour invested close to Rs 63 crore in the form of OFCDs in a company called Oscar Software. Oscar owns over 18.6 percent of News24’s shares. This would mean that E24 Glamour, which is indebted to Eminent, exerts an indirect control over News24.
In September 2012, Nahata’s Infotel — which owns half of VCPL — bought 23 percent of India TV’s shares from Shyam Equities, a company that is related to Reliance Industries. Shyam had bought this stake for Rs 100 crore in 2007. It was sold to Infotel for Rs 12.5 crore.
This sphere of influence also extends to News Nation, a 24-hour Hindi News television channel which is headed by the industrialist Abhey Oswal. Oswal Greentech and Oswal Agro, companies that are owned by Oswal, own 3.64 crore shares in News Nation, which amount to about 50 percent of the channel’s shares. Last year, in November, Digivision Media, (Nahata’s company that owns 50 percent of Infotel) invested Rs 10 crore in News Nation in exchange for 10 lakh non-cumulative redeemable preference shares. A preference share ensures that the holder of the share is assured a fixed sum of money — and on priority over other kinds of shareholders — from the company’s reserves or profits. A non-cumulative preference share would mean that Digivision would not be entitled to claim a foregone dividend that News Nation did not pay in a particular month or year, at a later date. Since the preference share is redeemable, News Nation would have to pay back the amount of money that Digivision had invested in it, on a date that would have been agreed upon by both the companies. The amount that Digivision invested accounts for 13.9 percent of the paid-up capital of News Nation. Shinano already owns 1.3 crore shares in News Nation, which are worth 18 percent of the channel’s equity.
The media groups in which Ambani and Nahata have invested are aligned to all hues of the political spectrum. Prasad, the owner of News24 and E24 Glamour, is married to the Congress leader and Indian Premier League Chairman Rajeev Shukla. She is also the sister of Bharatiya Janata Party’s Ravi Shankar Prasad, who is the telecom minister of India. India TV’s Sharma is perceived to be close to the BJP. As a student, he was a leader of the Akhil Bharatiya Vidhyarthi Parishad — the BJP’s student wing — and a member of the Rashtriya Swayamsevak Sangh. NDTV’s co-promoter Radhika Roy is the sister of Brinda Karat, a senior Communist Party of India leader. Apart from his shares in News Nation, Abhey Oswal, whose son-in-law Naveen Jindal is an industrialist and a Congress leader, also owns 14.17 percent of NDTV.
Three of the ministries that can act against this concentrated ownership of the media — the ministry of corporate affairs, the ministry of information and broadcast, and the ministry of finance — are all headed by Arun Jaitley, who maintains a largely favourable relationship with both the media, and media owners. Jaitley is particularly close to Sharma, who is also deposing for the minister in his defamation suit against Arvind Kejriwal, the chief minister of Delhi.
A 2014 article of the Newslaundry had visualized the ownership structure of the media companies. Now, while the numbers might have changed but the structure remains the same:
Republic TV is a part of ARG Outlier Media Private Ltd., which was primarily funded by Rajeev Chandrasekhar, a Bharatiya Janata Party member of parliament in the Rajya Sabha and the vice-chairman of the Kerala wing of the National Democratic Alliance . Through companies owned by him, he invested ₹30 crore (US$4.2 million) in it.
Where are the journalists?
Most journalists including editors are employed on contracts of three years or less, with an exit clause that permits them to leave or be fired on a notice of between one and three months. As a result, journalists have lost the courage to speak up or write about any issue that owners and managements do not want them to, including the issue of their own unstable working conditions.
And those who do, are removed from the front row citing various reasons. Punya Prasun Bajpai and Abhisar Sharma are prime examples of the same.
What this means
News-mongering is a thriving business where creation of news has taken a dominant role rather than reporting of news. Sensationalism is prioritized over relevance, and in this process the audience suffers. News channels ( and I am not talking only about broadcast) now compete with the entertainment channels for TRPs (eyeballs). Stakeholder management and keeping the promoters interest in mind, news is molded into a diplomatic speech which is in tune with what their promoters want to portray.
Instead of reporting facts, biased opinions are shoved down the throat of the audience. this has become so blatant in recent times that while following a certain issue, you can clearly tell that one channel is BJP supporting while the other is congress supporting.
Why is this happening
The biggest problem is fundamental in nature. While Media was supposed to be independent, with private news channels coming into the picture, the agenda of the news channels shifted from reporting relevant news to making revenue. Selling ad real estate in news papers and TV screens became more important than showing the right picture to the audience. Businesses need investors to grow, and to keep an operations heavy business like news channels, you need to have deep pockets. Since there are no regulations against any businesses or politicians not owning a news channel, this has led to news channels becoming PR machinary to many businesses and political parties.
What can be done
The Indian Media Ecosystem is a complex jigsaw puzzle.
- Till the time the ownership structures do not have any legal checks and balences or any conflic of interest clauses, the media will never be truly independent or biased.
- Also, we can follow the UK structure of actually allocating a certain amount of the tax money for news — News Tax — this money can go directly go to the media companies, and they do not have to reply on ads for money. This would apply to Doordarshan more than the private companies, but this can be used to increase the quality of DD much more.
- Subscription based revenue: What a lot of Online companies like wire & Scroll are doing is creating a loyal base of audience who pay directly for the news they are consuming. Many others like ET Prime and international publications like WSJ have also taken the same route.
Conclusion
I remember when I was small, I would wake up to the typical music of the Doordarshan News starting music at 10AM in the morning.
We lived in simpler times. Sadly, those days are gone.
What we have now is a mad race to an unknown goal where the Indian Masses have a chance of losing out to their source of authentic news.
Digital gives you options to choose your perspectives and caters to your taste. You can choose which bubble you want to be a part of. If you think digital is your escape, you are wrong! things are worse because the babel is even stronger there.
We are in the brink of the collapse of independence of Media as a whole. Sab but true!
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