26 April 2006

Scoop

As usual Indian Express is back at it, giving some scoop news. This is one more !
For those who want to read this article right away, here it is !

Is Maran arm-twisting Tatas?
Wednesday April 26 2006 07:51 IST

CHENNAI: MDMK leader Vaiko’s allegation that Union Minister Dayanidhi Maran has been pressurising, even threatening, Mr Ratan Tata virtually to hand over Tata DTH [Direct to Home] project to his family may end up as more than just an allegation by a political rival during an election campaign.

Inquiries by this website's newspaper lead to the conclusion that Dayanidhi Maran has a lot to explain which he seems not inclined to.

The this website's newspaper sent a list of specific queries relating to the allegation to the secretariat of Ratan Tata.

Within hours, came a cryptic, but profound, response from a Tata spokesperson: “We do not wish to make any comment.” The queries were pointed and contained serious allegations.

“Yet the Tatas did not deny any of the allegations, but merely chose not to comment on them. In effect, by not denying, the Tatas have actually confirmed the allegations in substance.

As for Dayanidhi Maran, when contacted at Coimbatore where he was on his election campaign, he evaded a direct reply when this website's newspaper asked him whether the allegation that he had put pressure on Tatas to grab the Tata DTH project was true. Instead, he spoke disparagingly about Vaiko.

The this website's newspaper inquiries indicate that the matter is likely to snowball into a serious issue as it concerns the most respected and ethically most upright industrial group in India, the Tata group.

The case that is emerging against Dayanidhi Maran is briefly this. The Tata group is in alliance with the global giant Rupert Murdoch’s Star TV for the Direct to Home [DTH] TV project. DTH broadcast carries the connectivity to TV at home without any cable through a set top box that sits on the TV. The value of this project runs into thousands of crores.

The Tatas presently hold 80 per cent of the project and Murdoch 20 per cent. The Maran family has acquired a DTH license. But there is a rider to that. Under its terms the Sun TV cannot hold more than 20 per cent like the Star TV cannot hold more than 20 per cent in the Tata Sky project. It has to find a partner for 80 per cent and also investment of thousands of crores!

Since the future belongs to DTH,Sun TV desperately needs to own DTH connectivity. That is why the Maran brothers, both Kalanidhi who runs Sun TV, and Dayanidhi who runs the ministry that is directly involved in DTH business, seem to have got interested in the Tata-Murdoch project.

This website's newspaper inquiries reveal that Kalanidhi Maran telephoned the Tata group chairman Ratan Tata and asked for a meeting. In the meeting he sought 33 per cent share in the Tata-Star DTH project with management rights. He demanded that Sun TV be given the shares at par, regardless of the real value.

This meant he not only wanted partnership but also at a huge concession. He also demanded to be included as promoter along with Tata and Murdoch.

Shocked by the brazen demand, Ratan Tata told him that it was Tatas’ project and they had no intention of parting with it to anyone. It was then that Dayanidhi Maran intervened.

Dayanidhi had meetings with Ratan Tata in which he began pressing him to part with the project. This seems to have intensified the struggle. Dayanidhi also contacted Rupert Murdoch himself and asked for 33 percent partnership, which the shocked global media baron politely declined.

Meanwhile, meetings took place in which the Marans began claiming that the executives of Tatas and Star TV and also Murdoch and his assistant at Hong Kong had accepted to give 33 percent partnership to Sun TV. These claims later reportedly proved to be false.

When Tata and Murdoch refused to oblige Dayanidhi and Tata wrote a letter to him saying that shares could not be given, Dayanidhi got upset. He reportedly threatened Tata that he would finish off their telecom project and subsequently his office promptly began withholding all normal clearances to Tata Telecom.

The minister ought to have known that since the telecom sector was beset by cutthroat competition, the withholding of ministerial approvals would impose huge costs and losses on Tata Telecom.

Evidently, that was the intent. Yet, despite all the pressures exerted, Tatas couldn’t care less and stood their ground.

The this website's newspaper had also sent queries to Kalanidhi Maran who heads Sun TV, Peter Mukherjee who heads Star TV in India and also Rupert Murdoch through his second in command in Hong Kong.

While others chose not to respond, the substance of the telephonic response from Sun TV was that when it already had a DTH licence why should it put pressure on Tata to grab their DTH project. This answer lacks credibility in view of the condition that Sun TV cannot own more than 20 percent of the project.

The specific queries addressed by the this website's newspaper and the cryptic response of the Tata office which speak volumes are captured here: The this website's newspaper wrote to the Tata office:

‘‘We understand that the pressure is on and that Tatas have resisted it so far and have also decided not to give in. We also understand that Mr Dayanidhi Maran has told Mr Ratan Tata directly that he will finish Tata Telecom and has also ensured that all normal clearances to the Tata group are withheld, so that the group’s telecom business suffers vis-a-vis its competitors.

We want to know whether this is true in substance.

We also want your clarifications in regard to the following:

Did Mr Kalanidhi Maran meet with Mr Tata and tell him directly to part with 1/3rd ownership of the DTH project.

Did Mr Peter Mukherjee of Star TV and Mr Ishat Hussain of Tata group meet with Mr Kalanidhi Maran in Chennai and tell him that it was not possible to offer any shares at par and the maximum that the Tatas could consider was to offer 20% at fair valuation?

Is it true that Mr Kalanidhi Maran got upset and spoke to Mr Tata in an inelegant language?

Did Mr Dayanidhi Maran speak to Mr Tata and advise him to offer 33% share in the DTH project to Sun TV?

Did he threaten Mr Tata that he would destroy the Tata telecom business?

Has he stopped all normal clearances of Tata Telecom?

Did Mr Kalanidhi tell Mr Tata that Mr Rupert Murdoch and his assistant in Hong Kong had agreed for 33% at par which was found by Mr Tata to be untrue?

Did Mr Dayanidhi Maran talk to Mr Rupert Murdoch for the 1/3rd share for Sun TV and threaten him also if he did not agree?

Did Mr Rupert Murdoch tell Mr Tata that he had not agreed for any share and that he had never come across any minister in any part of the world asking for ownership shares for himself?

Did the Tatas approach the PM and is it true that the PM has promised justice and has constituted a committee of secretaries to handle Tata-related matters.

Did Mr Tata write to Mr Dayanidhi Maran that he would not be able to offer shares in the DTH project?

Is it true that the Tatas are not talking about it openly because it is not their way of doing business or handling politics?

It is in response to these specific queries that the Tata spokesperson responded cryptically, but significantly with his remark: ‘‘We do not wish to make any comment’’ which is in itself a profound comment.

The critical aspect of the Tata reply is that they have not denied the facts mentioned in the queries addressed to them. Now that Tatas have not denied, it is for Dayanidhi Maran to respond. But, will he?

Posted by Shyam Krishnaswamy at 2:57 PM

3 Comments

  1. Blogger AnandtheLeo posted at Thursday, April 27, 2006 at 6:53:00 PM GMT+5:30  
    If this isn't fraud, then what is?
  2. Blogger Anusha Parthasarathy posted at Saturday, April 29, 2006 at 5:08:00 AM GMT+5:30  
    I was looking for this article. Found it in ur blog. To hell with Sun TV and Dayanidhi Maran!
    If JJ comes to power, ava vekkapora seriyaana aappu :)
  3. Blogger K.Shyam posted at Monday, May 1, 2006 at 6:18:00 PM GMT+5:30  
    anand: this definitely *is* fraud. "thatta" is saying that if dayanidhi is proved wrong he himself will sack dayanidhi from dmk ! such useless rehtoric
    anusha : of course, amma vandha sun tv mattrum scvku ooru big aapu set ayindu irukku !
    K.Shyam

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