Bhai bhai na raha

GROUND ZERO

THE BATTLE FOR THE SOUTH

When media starts writing on media, it invariably leads tocomplications. You know the old adage of those who live in glasshousesshould not throw stones blah, blah... Earlier there was a code within the mediaworld which was seldom bunged. Many say it was an incestuous in theinter connected sense of the word world and editors and owners steeredclear of writing about one another. Lately things have changed, infact, it has become fashionable for media to write on other media andcritically at that.Last week, we saw Indian Express make this transgression, the onewhere you cross the laxman rekha again. Common enough, one would say,for I do it week after week. Media stories are always dodgy becauseyou never know when media proprietors kiss and make up leaving thehapless journo holding the baby and the bathwater. Or one can simplyget it wrong completely because someone is planting a story on youwhich in your zeal, you forget to corroborate. Leading to all roundegg on the collective face. In this case, dutiful due diligence wasdone by the Indian Express reporter because N Ram was quotedextensively in the original story.
Anyway, according to the Indian Express and Financial Express story abitter battle has broken out among family members for control of oneof the country's oldest and most respected media companies, Kasturi &Sons Ltd, the publisher ofthe 132-year-old English newspaper The Hindu and business daily TheHindu Business Line. A day later, N Ram the feisty editor of the Hindusaid that he would sue both publications. Was it an empty threat orsomething more serious?
Closing ranks against the interloper and responding to a report in TheFinancial Express and The Indian Express about the battle in The Hinduboardroom, The Hindu, in a statement on its website, said that itsEditor-in-Chief N Ram “has decided to launch defamatory proceedings,civil and criminal” against Senior Editor Archna Shukla (thereporter), the Editor-in-Chief, Editors, and Publisher of The IndianExpress and The Financial Express responsible for the publication of“highly defamatory material”.
“This relates to news stories published in The Indian Express and TheFinancial Express... purporting to be reports on Mr Ram’s role andactions in relation to developments within the newspaper group and thecompany”, the statement said. The statement quoted Ram as saying thatthe reports are “riddled with demonstrable falsehoods and defamatoryassertions, some of them attributed to unnamed sources, made withreckless and maliciousdisregard for the facts and the truth”. Written in N Ram's strong purpleprose, if you please. Punch and counter punch, it was getting realsweaty in the ring by now.
The good thing is that Shekhar Gupta, editor in chief of IndianExpress Group has decided to stand by this story about a split downthe middle in the venerable Hindu. For he is obviously in the clearbecause he is merely reporting on events as they unravel in Chennai.And believe me some real unsavoury and bizarre events are taking placedown there. Defending its report, a statement issued by The ExpressGroup said: “The report, ‘Battle for controlbreaks out in The Hindu very divided family’, (The Indian Express, TheFinancial Express, 25 March 2010) is based on information receivedfrom multiple and high-level credible sources. All facts were verifiedand cross-checked to the highest standards of accuracy and fairnessthat The Express Group holds itself to. We believe our report wasneither malicious nor defamatory. We have great regard for The Hinduas an institution and for its editor-in-chief N. Ram as a journalistand editor for their commitment to principled journalism. We stand byour report and the reporter.”
On alaiwah.wordpress.com, this is the additional juice that I found.It is clear that an undercurrent of dissonance betwene family membershas been simmering for sometime now. This post on March 26 capturesthe other face of the family dispute : "Stripped of his powers by NRam, his brother N Murali has hit backsaying that he will not quit. And that he would try to “make Ram seereason and retire as Editor-in-Chief as committed by him in September2009 and ensure a smooth transition.”
“Some members of the Board of Directors have been trying tosystematically undermine and erode my authority and responsibilitiesand rights and obligations,” Murali wrote in an email to “colleagues”in the company today. “I will not allow that to happen.” Murali wasblunt in his email: “At the Board meeting on 20th March, someDirectors subjected me to utter humiliation and attempteddisempowerment. I will resist all attempts to deny me my rights,responsibilities and duties as the Managing Director.”
When contacted by The Indian Express, Murali said his email was inresponse to a circular sent by Ram to heads of departments announcinga change in his designation and his role. “The circular was sentannouncing my re-designation as senior managing director whereas I amcurrently the managing director. Along with this, all my powers weresubstantially and purportedly removed. My post has been given toanother board member,” said Murali. “My responsibilities have beenfarmed out to some other members on the board.” While Murali declinedto name the new appointee, sources said K Balaji, the younger brotherof K Venugopal, currently the joint editor of The Hindu Business Line,has been appointed as managing director in place of Murali by thefaction supporting Ram.
Now rewind to the original Express story in toto: At the heart of thisbattle is theproposed retirement of publisher and the group Editor-in-Chief N Ramand his decision to dig his heels in. The first casualty in the battleis N Murali, Ram's younger brother and the company's managingdirector. He was divested of his powers this week and replaced with KBalaji, a member of the extended family and also a board member.According to people close to the developments, the board is split, onegroup supporting Ram and the other seeking his retirement.
The sources claimed that at a meeting held last September, Murali, whoalso looked after administrative processes at the company, proposedgovernance norms for retirement of family members on the board. "Whilethe retirement age for all employees at Kasturi is 60 years, there wasno such stipulation for board members. It was proposed by Murali that65 years be set as the retirement age for board members," said thesources.
The Kasturi board of directors has 12 members, descending from fourcousins -- G Narasimhan (father of N Ram, N Ravi, N Murali); SParthasarathy (father of Malini Parthasarathy, Nirmala Lakshman andNalini Krishnan); S Rangarajan (father of Ramesh Rangarajan, VijayaArun and Akila Iyengar) and G Kasturi (father of K Balaji, K Venugopaland Lakshmi Srinath). According to the faction opposed to Ram, allmembers at the meeting agreed to the proposal and Ram, who turns 65this May, was identified as the first member to step down from theboard followed by Murali and N Ravi, who will turn 65 in August 2011and 2013 respectively.
It was also decided, these sources said, that after Ram's retirement,Ravi would take over as Editor-in-Chief of the group while MaliniParthasarathy would be appointed the editor of The Hindu and Venugopalthe editor of The Hindu Business Line. In a follow-up meeting held inFebruary, however, Ram is said to have declined to give up thepositions he holds across the company, including the board membership,the sources said. However, in an email response, Ram said: "Noretirement age has been stipulated for directors or theeditor-in-chief or editor etc. No retirement age is stipulated in theMemorandum and Articles of Association of the Company."
On whether he had agreed to give up all positions in May this year, hesaid that was "completely, utterly wrong." Prior to the meeting inFebruary, Ram is said to have recruited two family members in thecompany: Narayan Lakshman, son of Nirmala Lakshman; and Vidya Ram, hisdaughter. A PhD from London School of Economics, Narayan was hired asthe Washington correspondent of The Hindu whereas Vidya, a graduatefrom the Columbia School of Journalism, was appointed the Europeancorrespondent of The Hindu Business Line.
This was strongly objected to by Murali, Ravi and Malini Parthasarthy,among other members, who alleged that these appointments were madewithout the board's consent and proper governance norms were notadhered to. They also pointed out several alleged financialirregularities in the way in which Kasturi's resources, financial aswell as editorial, were used to further the interests of some boardmembers.
The family members had another stormy meeting on March 20 where theissue of retirement and, also, the norms for induction of familymembers on the board were supposed to be discussed. "Instead of theseissues, the pro-Ram faction targeted Murali alleging he was trying totarnish the image of the company," a source said.Murali was eventually removed from the position of the MD. A formalannouncement to this effect, however, has not been made as yet.Meanwhile, Ram declined to comment on whether the board had decided todivest Murali of his powers saying it was an internal matter of thecompany.
On allegations of irregularities in appointments of family members, hesaid: "Any appointment of a relative of a Director that neededapproval by both the Board of Directors and shareholders before goingto the central government was approved unanimously without a murmur ofdissent by any Director or Shareholder. Every one of the 12 directorsof the company approved every such appointment."
And if all this high octane battle for control was not enough, a newtwist was added when sources in the company, however, said that threeshareholders of the company expressed their concerns. They areMurali’s children Kanta and Krishna and Ravi’s daughter Aparna.In fact, in a strongly worded letter to board members, all three ofthem questioned the manner in which family members were appointed.They wrote: “It is essential that the Board considers issues of corporategovernance and the appointment of family members seriously. To pointout the obvious, the business cannot accommodate every member of thefamily, particularly when there are no institutional mechanisms inplace to prevent the receipt of unjustifiably large entitlements overa long period of time. Each of us, whether in the previous, current ornext generation, has received and continues to receive tremendousbenefits from Kasturi and Sons, which far outweigh those received bynon-family employees. It is high time that we recognize that ourprivileges are derived primarily from the contributions and loyalty ofover 3500 non-family employees. Each one of us has, in some way or theother, abused their loyalty, trust and contribution."
“The inequitable and arbitrary system that currently exists is notonly unfair to non-family employees but to shareholders as a class aswell. If there is ever any intention of instituting sound and moderncorporate governance practices and discontinuing the feudal systemthat exists, then issues such as the ones we have raised need to beaddressed squarely, honestly and without fear or favour.” This iscertainly not the last that we are going to hear about this Ram vsMurali battle royale. Bhai bahi na reha is being reprised again andagain. The Hindu joust has surfaced in the past as well and thesefissures will continue to appear. Sections of media will be used inthis scrap as the pressure mounts on Ram to quit. The Hindu battlingthe Times of India in Chennai could well do without this needlessunsavouriness which diverts the management's attention and energy.Blindsided by an internal dispute, they may well lower their guardagainst the predator at their door.