On September 8, Zee Business broke an unusual story. Unusual because it portrayed the governing Bharatiya Janata Party government led by Prime Minister Narendra Modi in a bad light.
If you are a keen news consumer, then you’d know that Zee Media Corporation and its news properties rarely practice the kind of journalism that holds the current dispensation accountable.
This was a significant departure.
With hashtags like #UneaseofDoingBusiness, the Zee Business “exclusive” investigation was based on a classified document of the Financial Intelligence Unit (FIU), which comes under the Union Ministry of Finance. Zee Business Deputy Editor Mihir Bhatt stated that this document was proof that the Modi government was indulging in “tax terrorism”. He claimed that the document has names of big companies, some multinational corporations, which are being wrongly targeted and labelled as tax defaulters by the Modi government: “Kya tax vasooli ke naam pe sarkaar zaroorat se zyada sakhti nahin barat rahi hai [Isn’t the government coming down too hard in the name of tax recovery]?” he asked.
What Bhatt conveniently forgot to mention is that the FIU document also has names of two companies that have links to his top boss, Essel Group Chairman Subhash Chandra.
The omission appears more than deliberate when you consider how Zee Business got its hands on the confidential FIU document.
An email instruction
Two days before Zee Business broke its exclusive story, on September 6, an email from Chandra’s office went out to DNA Editor-in-Chief Dwaipayan Bose, which read, “Pls do needful asap”. (Newslaundry has accessed this email.)
The email contained an attachment, which was a letter from the FIU to banks, dated August 16. The letter stated that “a list of tax defaulters who are untraceable/have no assets for recovery has been identified”. It urged the banks to find out if these tax defaulters (companies and individuals) maintained accounts with them and to provide details of these accounts. The attachment also had the list of close to 100 tax defaulters, which includes companies like Nokia, Vodafone, Essar, Loop, Employees’ Provident Fund Organisation and so on. (Newslaundry has accessed the FIU letter to banks.) According to the FIU document, the total tax amount owed by these companies amounts to a staggering Rs 2.85 lakh crore.
This list is the confidential FIU document on which Zee Business based its exposé that was aired through the day on September 8. The same documents also formed the basis of a story published in DNA on the very same day, headlined, “Corporates question tax defaulters list that MoF sent to banks”. The FIU letter was also passed on to Bhatt.
It is pertinent to note here that Chandra, along with being a media tycoon and businessman with interests across sectors like infrastructure, technology, health and so on, is also an Independent Rajya Sabha member from Haryana backed by the BJP. According to the code of conduct for Rajya Sabha members, “If Members are in possession of confidential information owing to them being Members of Parliament or Members of Parliamentary Committees, they should not disclose such information for advancing their personal interests.”
While it can not be ascertained if Chandra’s office procured the confidential FIU document by virtue of him being a Rajya Sabha MP, it is alarming that it was forwarded to the DNA editor and presented to further a one-sided picture of the finance ministry’s efforts towards tax recovery.
The tale of two companies
Both reports in Zee Business and DNA tear into the finance ministry for writing to banks with details of tax defaulters. The reports question the motives of FIU and put up a strong defence for the companies under its radar, stating that the FIU list goes against Modi’s ease-of-doing-business project.
At one point, Zee Business anchor Mihir Bhatt, while questioning the methodology of the list, calls it irresponsible. He then asks BJP spokesperson Gopal Krishna Agarwal if the FIU official who made the list would be brought to justice.
Bhatt while naming some companies like Essar, Gitanjali Gems, Bhushan Steel and Vodafone, questions how FIU could come to the conclusion that such big companies have no assets. This is a misreading of the notice that simply states that the companies listed as tax defaulters don’t have “assets for recovery” as opposed to having no assets at all. The list is, in essence, urging banks to look into assets of these companies to recover the huge tax amount pending against them since these companies had not listed any asset or account numbers for tax recovery.
More worryingly, in a direct conflict of interest, Zee Business and DNA’s reports make no mention of companies linked to Chandra that also feature in the FIU list.
These two companies that are listed as tax defaulters are Direct Media Distribution Ventures and Ganjam Trading Company. Together, they owe Rs 1,887 crore as pending tax. Direct Media is among the top 10 defaulters and owes Rs 1,674 crore. The top defaulter is Hassan Ali Khan (Rs 1.25 lakh crore), who was booked by the Central Bureau of Investigation on money laundering charges.
According to documents with the Ministry of Corporate Affairs, Essel Corporate Resources Private Limited owns 99 per cent equity shares in Direct Media Distribution Ventures. Its Additional Director Mukund Galgali is director of Diligent Media Corporation, which is an Essel Group company. Direct Media Distribution Ventures is also one of the promoter groups of Essel’s Dish TV. Similarly, Ganjam Trading Company is part of the promoter group of Essel Propack. Both Ganjam Trading and Direct Media Distribution Ventures operate out of NM Joshi Marg at Lower Parel in Mumbai.
In essence, Zee Business and DNA while attacking the FIU list, defended the companies and, by default, those companies linked to Essel Group, without so much as issuing a full disclosure.
Newslaundry reached out to Chandra, Bose and Zee Editor Sudhir Chaudhary with these questions.
1) A mail from Dr Chandra’s office went to DNA editor on September 6. This email had an attachment of classified FIU documents with a list of tax defaulters. Could you confirm?
2) Two days later, Zee Business and DNA carried stories on these documents but they did not mention the companies owned by Essel. Could you explain the reason behind this editorial call?
3) FIU documents are classified. By virtue of Dr Chandra being a Rajya Sabha MP, would you consider it is against the code of conduct to circulate such documents?
4) Do you think Zee Business and DNA doing stories on a document that has names of companies linked to Dr Chandra amounts to a conflict of interest?
Chandra replied saying: “This is all not true. I did not write any mail to any one. Nor am I aware of any list what is being referred in the mail.”
The mail may not have been written by Chandra but it was indeed sent out from his office. When this was pointed out to Chandra, requesting him to answer the queries, he replied saying, “I have no information knowledge about this, I have already said in my earlier reply, so why this mail again?”
Sabse bada rupaiyaa
The Indian mediascape does not have laws on cross-ownership, but this case reveals how media owners with multiple business and political interests can use news channels to further their interests rather than work in public interest.
It also shows that when it comes to business considerations, media owners are likely to set aside their political leanings.
In fact, in January last year, Chandra’s book The ‘Z’ Factor was launched by Modi at his residence in 7 Lok Kalyan Marg.
During news events like the Surgical Strikes or the JNU ‘azadi row’, Zee News has often acted as the BJP’s mouthpiece. So much so that Chandra thought it was important to make an appearance on Zee News and issue a clarification that the channel was “pro-India” and not pro-BJP. But when it came to the government probing companies linked to Essel, Chandra’s very own news outlets launched an all-out attack on Modi Sarkar for indulging in ‘tax terror’.
Clearly, it is for the BJP government to see if it will be useful in the long run to have a media industry with owners more invested in journalism than propaganda.
The author can be contacted on Twitter at @MnshaP.