Inside the Network18 takeover

[Technoglitch]

The board meeting of Network18 Media and Investments Ltd in Delhi on 27 May was supposed to be a humdrum affair, as most such meetings are, and was turning out to be one. All directors except Subhash Bahl were in attendance. Chief financial officer R.D.S Bawa, 61, presented the company’s latest financial numbers, which were quite good compared with its performance in the past. Revenue for the year to 31 March had increased 12% to Rs.2,692.4 crore from the previous year. The company had swung to an operating profit of Rs.87.2 crore from an operating loss of Rs.39.3 crore in the previous year. Group chief executive officer B. Saikumar summarized that all divisions of the company—news, entertainment and digital—had posted impressive growth. The digital unit’s loss had narrowed to Rs.80.6 crore from Rs.125.4 crore in the previous year. The news division, especially, had done well, aided by higher advertising and subscription income. All in all, it had been a good year. It was then that Raghav Bahl, 51, founder and managing director of Network18, dropped the bombshell, according to a person present at the meeting who asked not to be named.

The trigger Sometime in early March, Sardesai had got a call from Ambani, who was livid. “He was like—why is the channel (CNN-IBN and IBN7) venting all kinds of views against him?” said a former Network18 official who is aware of the conversation. He didn’t want to be named. Throughout the run-up to the November-December state assembly elections and its aftermath, Ambani had been angered by the attacks made on him by Arvind Kejriwal, leader of the Aam Aadmi Party (AAP). The party had captured the public imagination and gone on to form a short-lived government in Delhi. Kejriwal had gone all guns blazing for Ambani—in press conferences, speeches, at rallies and pleas to the Anti-Corruption Branch. He had made several allegations. To begin with, he had named Ambani in accusations about crony capitalism; he then filed a first information report (FIR) against him, along with RIL and some central government ministers and officials over alleged irregularities in the pricing of natural gas from the Krishna-Godavari basin off India’s east coast.

At this juncture, a call to Sardesai seemed like a good idea. After all, RIL indirectly owned Network18. “They wanted a complete blackout of Kejriwal and AAP,” said another Network18 official who was privy to the conversation but did not want to be identified. “Rajdeep refused, saying it was just not possible. He stood by the spirit of journalism. So they were miffed that the channel had not boycotted the AAP.” Pressure was mounting on Bahl, too. According to an RIL official who is now part of the takeover team at Network18 but refused to be identified, Manoj Modi, the right-hand man of Mukesh Ambani, reached out to Bahl. “Modi was furious. He was like—‘tum humko dacoit bulate ho, tum chilla rahe ho ki hum crony capitalist hai. Agar aisa tha to dacoit se paise mangne kyon aye the? Tum kaun se doodh ke dhule ho?’ (You are calling us a dacoit, you are shouting that we are crony capitalists. If that is so, then why did you come to us for money in the first place? Do you think you have a clean record?),” says the official.

http://www.livemint.com/Companies/rqT2Oi8fwv4XVjJcHzlcVN/Inside-the-Network18-takeover.html?utm_source=copy