September 08, 2010

life in journalism: many indian media editor-in-chiefs are under unhealthy influence of large Indian companies

I have written earlier (my blog post of 29 October 2008) and I will say it once more: Many editor-in-chiefs of Indian media organisations are often under an unhealthy influence of large Indian companies and large Public Relations companies. Whether they are aware about this facet about themselves, I can't say. But I know for sure that almost all of them claim that they are among the very best editors in Indian media.
The whole thing is highly unfortunate and an impediment to good journalists. But there is always a ray of hope. Like in every profession and every sphere of life, the unhealthy influences do not sustain continuously and indefinitely.

Here is a reproduction of my 29 October 2009 blog post:

{Update, 1 Nov '08: In the post below I wrote about elements in corporate India using some of the top media editors to plug their agenda. I just came to know that one of the Chandra brothers of Unitech is using 1/2/3 top editors through their obnoxiously close connection with a notorious PR agency (that handles accounts of the several companies of largest corporate group in India, and is now pitching for Unitech's account or already got Unitech's account) to pressurise Sebi to haul up the imaginary short sellers. Unitech, a real estate company, is in deep shit with regard to its finances. A large chunk of its properties are currently lying mortgaged with Indiabulls. There is much more going on in these connections. Its very very ugly. Its a shame on Indian media as well, particularly on these top editors who are batting for Unitech shamelessly}
Elements in India Inc are playing their dirty games in the financial marketplace yet again. This time they are on a witch hunt against sellers, including short sellers, in the market by attributing the motive of market manipulation to them. Unitech's promoters, the Chandras, have already complained to Sebi to probe the fall in their stock's prices. Others are doing it subtly and one of their tactics is to use some of the top media editors to play up their agenda.
With their market capitalisation down they are finding it difficult to raise funds to repay earlier debts or fund committed expansion plans. A brokerage firm official from UK called up his friend in an Indian brokerage firm to tell him that some of Tata Steels debt issues were going for an effective yield of above 20% per annum in the UK market. That meant Tata Steels is not able to raise debt without having to offer a 20% effective rate of interest to lenders.
Through their confederations/associations they made the finance and commerce ministries they even got Sebi to direct FIIs not to lend shares abroad, with effect from 20 October, through offshore derivative instruments that was otherwise not prohibited.
When excessive leverage and massive long buying took up the markets to unrealistic heights then these very companies were silent because they could tap funds from the market (through new issue of shares from the public in the primary market) at any price they deemed fit. The DLFs and Unitechs of the Indian corporate world raised capital at absurd valuations during the 2005-07 bull run.
Witch hunts, says this website, "According to American Heritage Dictionary, a witch hunt is a political campaign launched on the pretext of investigating activities subversive to the state." In the context of the Indian stock market, it is a corporate campaign launched on the pretext of investigating short sellers and other sellers of stocks in the equity market. It is similar to the McCarthyism in the 1950s in the US when almost every Tom, Dick and Harry in the US was alleged to be a communist and anti-American.
I did some analysis of (i) world markets movements that showed Indian market being in sync with others in the world, (ii) trading pattern of FIIs, domestic institutional investors (DIIs), brokers proprietary accounts and retail+NRIs+non-institutional corporate investors and it showed the dominance of FII selling but also showed the buying by DIIs and retail-plus category, and (iii) the amount of shares lent by FIIs abroad before they were stopped from doing so from 20 October and after they were made to disclose their lent shares positions from 10 October. The three visuals below bring these out. Click on each one of them to enlarge and see clearly.

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