A news agency formed to take on PTI’s monopoly six decades ago, United News of India’s slump over the past 10 years recently culminated in the initiation of the insolvency proceedings against it.
On May 19, the National Company Law Tribunal passed an order in favour of UNI’s employee union group, which claims a debt of Rs 103 crore, and initiated a corporate insolvency resolution process.
In a , UNI said it was “embarking on a journey towards better financial prospects”.
Will UNI get a new lease of life through investors? Or is it the end of the road?
Set up in 1959, United News of India has been in distress for the last 10 years. Its decline began in 2006, when its subscribers, including its shareholders, started unsubscribing it one by one. The agency began defaulting on its payments to its employees from 2017.
One of the biggest blows to UNI came in October 2020, when Prasar Bharati unsubscribed its services, taking with it crores worth of annual revenue. Prasar Bharthi used to pay UNI Rs 57.5 lakh per month for its services. From 2016, it withheld 25 percent of the amount, before terminating the contract four years later.
The final nail in the coffin was the NCLT order which said that the UNI union had succeeded in establishing the default on part of the “corporate debtor” in payments of the employment dues. It said the same was covered in the definition of operational debt and also, a trade union could file an insolvency petition.
The insolvency suit, filed by the employee union last April claimed that UNI owed Rs 103 crore to its workers, including salaries of current staff and wages, gratuity and provident fund arrears of former employees. The union had alleged that this was in violation of the basic dignity of the employees, who had given their sweat and blood to UNI, and worked diligently.
Pooja Bahry, the tribunal-assigned insolvency resolution professional, told Newslaundry that a “lot of people” have shown interest, as UNI had a brand value.
An insolvency resolution professional is appointed by NCLT authorities after an insolvency application is approved. Their job is to gather claims, verify them, gather information relating to company assets, and determine the company’s financial position.
Bahry said she’s invited UNI debtors to submit their claims, which she’s in the process of verifying. She’s also visiting UNI’s properties across the country. “We are not thinking of going into liquidation right now and are hopeful we can turn it around,” she said. “UNI has an amazing brand value, and there are a lot of people who want it to be a success. We are hopeful that it will come back bigger than ever.”
According to some sources, UNI’s main asset is its building in Rafi Marg in New Delhi. The land, allotted on lease by the government, may now act as UNI’s main selling point. There are rumours that Hindustan Samachar and also a certain godman expressed interest in acquiring it – but these have not been verified.
Meanwhile, UNI editor-in-chief Ajay Kaul told Newslaundry he wants to save the company since UNI is a “reputed brand that shouldn’t die”. “Now since NCLT has set in this process, investors will pitch in. Employees are hopeful. We have added 30-40 subscribers in the last 10 months alone and have around 600 subscribers.”
UNI’s union head Rajesh Puri also told Newslaundry he is hopeful that investors will come in and revive the brand.
But it is uncertain how much the news agency’s now lost glimmer and sluggish recovery will lure investors. It’s plagued by pending payments to its employees and there is resistance by some shareholders. Read our on why shareholders may not be on board.
Meanwhile, the news agency in its earlier reply to a demand notice sent by NCLT had said that it owes “no debt” to the union and the demands being raised were “false, wrong, baseless, and mischievous.”
“First UNI abandoned us, then the government abandoned us. Who will abandon us next?” asked Mahesh Rajput, a UNI employee of 23 years, and general secretary of the Chandigarh union of UNI. Rajput’s skepticism isn’t isolated.
In the insolvency order, the NCLT mentioned Sagar Mukhopadhyay as the chairman of the company’s board of directors, and Binod Kumar Mandal and Gautam Singh as directors of UNI. However, as per documents accessed by Newslaundry, all three had resigned as directors of the board in September – eight months prior to the order.
A senior member of the management claimed that the reason for this move was the resistance the news agency has faced from shareholders over getting new investors on board.