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Tehelka up for sale

THE HOOT STORY
K.D. Singh said that while he did not want the Tehelka brand to die, he was negotiating with different individuals to sell the 65.75 per cent stake in Anant Media held by Royal Building. PARANJOY GUHA THAKURTA and MOHAMMAD GHAZALI explore the financials of the company and its principal stakeholder. Pix: KD Singh and Tarun Tejpal
Posted/Updated Sunday, Apr 13 19:44:43, 2014

The person who controls the company which currently publishes the iconic magazine–whose founder editor Tarun Tejpal has been behind bars from 30 November facing allegations that he sexually assaulted a junior colleague–wants to sell his stake in the firm. But the seller, Kanwar Deep Singh, a controversial Rajya Sabha Member of Parliament belonging to the All India Trinamool Congress (TMC), is yet to hone in on a buyer though he claims he has received various offers and is close to clinching a deal.

Senior journalists working with the weekly claim that Singh, whose company, Royal Building and Infrastructure Private Limited, owns two-thirds of the shares of Anant Media Private Limited (formerly Agni Media) which brings out , has categorically told them that he is keen on ensuring that the media organization not just survives but also prospers.

Tehelka (literally meaning “sensation” in Hindi) was founded as a website by Tejpal and Aniruddha Bahal in 2000. It became a printed tabloid-cum-website in 2004 and then, a regular magazine in 2007. Its staffers have conducted a number of sting operations, including ones to reveal cricket match fixing, corruption in defence purchases and against those accused of communal violence in Gujarat.

In a telephonic interview with thehoot.org, K.D. Singh said that while he “did not want the Tehelka brand to die”, he was negotiating with different individuals to sell the 65.75 per cent stake in Anant Media held by Royal Building, the company he heads as chairman emeritus. “The process is on…it (the deal) can be concluded in a week or it could take a few months,” he said, while on the campaign trail for his party in West Bengal.

Why did he want to sell his stake in Anant Media? “This is not my cup of tea,” said the 52-year-old businessman-turned-politician who entered the upper house of Parliament in 2010 nominated by the Jharkhand Mukti Morcha (only to change his political affiliation to the TMC a few months later).

A company headed by him (Alchemist Media) brought out a business daily, Financial World,  first out of Chandigarh, then out of Delhi from April 2011 before shutting down its operations less than two years later. “This (meaning publishing) is not my forte…I want to concentrate on my work as a Parliamentarian,” said Singh, who also happens to be president of the Indian Hockey Federation and the Haryana Hockey Association.

Having started businesses in making wire mesh and steel fencing in 1988 under the banner of Turbo Industries in Chandigarh, the name of the corporate group led by Singh was changed to the Alchemist group in 2004.

The group is currently in healthcare, pharmaceuticals, food-processing, poultry (with its Republic of Chicken brand), real estate, restaurants, infrastructure development, road building technology, aviation, education and tea estates. The 11 companies in the group employ over 9,700 people and have a combined turnover of Rs 10,000 crore, according to the group’s official website.

K.D. Singh’s son, Karan Deep Singh, became chairman of the group after the former re-designated himself as chairman emeritus in 2012.

In 2011, Royal Building had picked up 1,30,510 equity shares with a face value of Rs 10 each of Anant Media at a premium of Rs 2,505 per share, implying a total investment of Rs 31.95 crore.

Investigations conducted by Raman Kirpal (a former employee of Tehelka) published in Firstpost.com on 28 November 2013 revealed a series of questionable transactions in the shares of Anant Media. (See here. )

In June 2006, Shoma Chaudhury, the magazine’s then editor, features, sold a third of the 1,500 equity shares allotted to her at a price of Rs 10 each to A.K. Gurtu Holdings Private Limited at a premium of Rs 13,189 per share, thus earning nearly Rs 66 lakh on an investment of Rs 5,000 in less than three years.

Tarun Tejpal’s wife Geetan Batra sold 2,000 equity shares to the same company at a premium of Rs 13,189 per share, earning Rs 2.64 crore. Tejpal’s brother Minty Kunwar sold 1,500 shares to A.K. Gurtu Holdings for nearly Rs 2 crore, their father Inderjit Tejpal offloaded 1,000 shares to the same firm for Rs 1.32 crore and their mother Shakuntla sold 1,000 shares for Rs 1.32 crore. Tarun’s sister Neena T. Sharma, who was the company’s chief operating officer, sold 432 shares for Rs 57 lakh.

On the day most of these transactions took place, Tarun himself acquired 4,125 shares from Shankar Sharma and Devina Mehra (who had invested in the company in 2000) but at the par value of Rs 10 per share.

Raman Kirpal’s facts have not been denied so far. They are based on RoC figures. Tejpal basically used legal methods to increase the value of his assets and those of  his family and colleague. Government agencies such as the IT department will have to ascertain whether any laws were violated in the transactions relating to A K Gurtu holdings.

Besides Shoma Chaudhury, another individual who was not from the Tejpal family gained considerably from transacting in shares of Anant Media. He was Fakhruddin Taherbhai Khorakiwala, former sheriff of Mumbai, who headed the Wockhardt group, one of India’s leading pharmaceutical and biotechnology groups with an annual turnover in excess of $ 600 million, much of it from outside the country.

Khorakiwala, who passed away in July 2011, also headed the Akbarallys chain of departmental stores in Mumbai and was awarded the Padma Shri. In 2005,  he had “bailed out” Tehelka by investing Rs 4.65 crore in 19,326 equity shares of Anant Media at a premium of Rs 2,409.35 a share.

Anant Media’s balance-sheets reveal that Khorakiwala offloaded all his shares to A.K. Gurtu Holdings in 2006 at the premium of Rs 13,189 thereby earning a handsome profit of Rs 25.49 crore.

All these transactions were taking place while Anant Media was incurring losses.

Kirpal and other journalists tried to find out the names of the persons behind A.K. Gurtu Holdings, which invested Rs 40 crore in the company publishing Tehelka in 2006, and then just “disappeared”. The company did not exist at the addresses given in official documents.

According to Kirpal, A.K. Gurtu Holdings “suddenly folded (up) its investment in 2007 and its shares were transferred at a loss to two companies – Enlightened Consultancy Services Pvt Ltd and Weldon Polymers Ltd – at a premium of Rs 10,623.” Strangely, Enlightened Consultancy had the same address as that of A.K. Gurtu Holdings.

Two years later, in 2009, Enlightened Consultancy closed its operations after registering losses from the Rs 17 crore investment it made in Anant Media. However, Enlightened Consultancy funded Weldon Polymers Private Limited, which held 5.87 per cent of Anant Media’s shares.

In the same year, the Jaipur-based Rajasthan Patrika Private Limited, which publishes a leading Hindi daily by the same name, invested Rs 1.75 crore in Anant Media by buying 3,886 shares (or 1.96 per cent of the company’s total equity holding) at a premium of Rs 4,493.35 per Rs 10 share.

Government records indicate that at the end of 2013 the Tejpal family owned 23.25 per cent stake in Anant Media and Shoma Chaudhury owned an additional 0.5 per cent, whereas till 31 March 2011, Tarun Tejpal, his family and friends held approximately 47 per cent stake in the company.

Anant Media’s losses rose from Rs 39.5 crore in 2009-10 to Rs 55 crore in 2010-11 and further to Rs 66 crore the following year.

In 2012, Royal Building headed by K.D. Singh invested close to Rs 32 crore in Anant Media by buying 1,30,510 shares of the company at a premium of Rs 2,505 per share.

Records of the Registrar of Companies (RoC) in the Ministry of Corporate Affairs show that at that time, besides Royal Building, other shareholders in the company publishing Tehelka included London-based fashion designer Priyanka Gill (2.14 per cent) and two high-profile politicians from the country’s two largest political parties, Bharatiya Janata Party MP and former Law Minister Ram Jethmalani (0.08 per cent) and current Law Minister and Congress MP Kapil Sibal (0.04 per cent).

When questioned, Sibal told journalists that he had given a donation of Rs 5 lakh to Tejpal in 2003 and had not applied for any shares of Anant Media although the records of his own government’s RoC lists his name as a shareholder in the company.  (Sibal had been accused by the BJP of attempting to “shield” Tejpal in the sexual assault case on account of his association with Tehelka, a claim he has denied.)

There are reports that the recent financial transactions in Anant Media are being examined by various government bodies, including the Central Board of Direct Taxes in the Ministry of Finance.

Why had MP K.D. Singh chosen to invest nearly Rs 32 crore in Anant Media at a time when the company (as per the last balance sheet it has filed with the RoC for the 2011-12 financial year) had a negative net worth of Rs 12.8 crore and negative reserves and surplus to the extent of almost Rs 28 crore?

“The balance sheet of a media company does not often reflect its true market value,” Singh told The Hoot,  adding that when he had invested in Anant Media in 2011, an international firm (whose name he did not readily recall) had valued the Tehelka brand at Rs 120 crore.

How much did he hope to gain by selling his two-thirds stake in Anant Media? “I am willing to sell at the same price at which I bought the shares (or nearly Rs 32 crore) without adding interest,” he said.

After Royal Building became the biggest shareholder of Anant Media, three new directors were inducted into the company’s board. They were Dr Praveen Rathee (who remains the managing editor of the magazine), Satish Mehta and S.K. Ganju, who was subsequently replaced by Anil K. Oberoi.

In March 2014, Tarun Tejpal and his sister Neena both resigned as directors of the company. Singh pointed out that after Tejpal was accused of sexual assault, many journalists left the company. “The organization was in a state of turmoil,” he pointed out. “Given the exodus of talent, the publication needs to induct new professionals.”

After Neena Tejpal handed over charge, accountants went through the books of account of Anant Media. “For roughly five weeks in late-February and early-March, they conducted what was supposed to be due diligence of the company,” said an insider with knowledge of what happened, speaking on condition of anonymity.

Thereafter, in late-March, K.D. Singh himself met some of the senior journalists associated with Tehelka, including veteran columnist and editorial adviser Prem Shankar Jha (who is also an author and was press adviser to former Prime Minister Vishwanath Pratap Singh) and executive editor Ramesh Sharma.

Singh met them in the Nehru Place office of the Alchemist group and not in the Anant Media office in Greater Kailash – II. As the MP pointed out: “I have always been a silent shareholder. I have never interfered in the management of the company and, in fact, have never  visited the Tehelka office… not even once in the last few years during the time I have been associated with the magazine.”

During his meeting with the senior journalists of the magazine, why did he assure them that he would invest more in Anant Media, help raise advertising revenue and getTehelka to provide content for the “a1Tehelka” television channel which has a prominent footprint in Haryana?

Said Singh: “I repeat that I don’t want the Tehelka brand to die but to grow under a new management. As for the television channel, it is owned by a separate company though it has a content agreement with Tehelka.”

Besides Royal Building, K.D. Singh, Tarun and Neena Tejpal are involved in another company, Amaraman India Private Limited, which came into existence in 2012. Tarun holds 70 per cent shares in this company while Singh owns 10 per cent. This company was supposed to collaborate with Doordarshan to produce 52 episodes of a television series celebrating 100 years of Indian cinema. However, “the project did not take off,” said Singh.

According to a journalist working with Tehelka who spoke off-the-record, his office was buzzing with speculation that one of the potential buyers for Royal Building’s stake in Anant Media is Singh’s fellow Rajya Sabha MP from Jharkhand, Parimal Nathwani, group president, Reliance Industries Limited, India’s biggest private sector company headed by the country’s richest man, Mukesh Ambani.

When contacted by thehoot.org, a source close to Nathwani denied that either he, in his individual capacity, or RIL was interested in owning a controlling stake in the company that publishes Tehelka.

As for K.D. Singh, his track record as a businessman has been quite controversial.

In March 2011, he was intercepted at the airport in New Delhi before he left for Guwahati, Assam (where assembly elections were taking place) carrying Rs 57 lakh in cash. He was let off by officials of the income tax department who claimed he was carrying the money for “legitimate” business purposes. The officials were, however, suspended by the Election Commission after leaders of the Communist Party of India (Marxist), political opponents of the TMC, complained.

Between July and September 2013, the Securities and Exchange Board of India barred group companies, Alchemist Holdings and Alchemist Infra Realty, from accepting deposits from the public and order them to repay Rs 1,400 crore that had been collected from around 1.5 million investors. According to media reports, the government has ordered a probe into the affairs of these companies by the Serious Fraud Investigation Office in the Ministry of Corporate Affairs in 2012.

Besides the two group companies named, another firm, Alchemist Capital is reportedly under the scanner of the ministry for allegedly accepting deposits against fictitious property certificates and for issuing shares to investors without proper regulatory approval. (See _alchemist-group-deposit-taking-companies-corporate-affairs-ministry and collective-investment-schemes-sebi-order-sebi-probe.)

The SEBI and the RoC have reportedly warned the company and its directors that prosecution proceedings would be initiated and criminal cases lodged for offences of “fraud, cheating, criminal breach of trust and misappropriation of public funds” if its orders are not complied with.

In February 2009, the Income Tax Department raided premises of the Alchemist Group across India following which unaccounted money worth Rs 22 crore had to be surrendered.

In 2011, government agencies started investigations into investments made by Alchemist group companies in firms such as Usher Agro, Sel Manufacturing, Dhanus Tech, Pyramid Saimira and Resurgere Mines, following complaints that share prices of these companies had been rigged.

Member of Parliament Singh seems to have enough to worry about besides finding a buyer for his stake in the company that publishes Tehelka, even as he seeks to focus on his political career with the party led by West Bengal chief minister Mamata Banerjee.

 

Read mor ehere — http://thehoot.org/web/home/story.php?storyid=7430&pg=1&mod=1&sectionId=4&sectionname=Media%20Business

 

 

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