Saturday 25 June 2011

Kasturi and Sons


The issue is transformation in the face of competition and change

Excerpt from paragraph 8 of the CLB order of 20 May 2011 by Judge Lizamma Augustine.

“The far reaching consequence of the proposals is that a shareholder of the company will be perpetually debarred from holding the post of editor of The Hindu, which in my view is contrary to the tradition and practice followed by the company since its inception. Besides, it is doubtful whether the proposed advisory board which consists of members of the rival groups would be able to effectively guide the non family editor in discharging his duties. I am of the prima facie view that except ‘the wholesale removal of the family editors’, the present proposals do not take in any other aspect. The board had not addressed the aspects (retirement entry and exit norms etc), referred to in my earlier order. It also appears that the Board has given a go by to the idea of framing guidelines for succession or rather they have limited the directions of the CLB only to the extent of removing the entire family editors.”

It is not easy for us to add anything sensible to the dispute amongst the owners of the company that publishes The Hindu and Businessline daily newspapers, and the periodicals Frontline and Sportstar. Nevertheless as usual we tend to barge in where angels fear to tread. The dispute has been covered in the daily press which in India is generally loath to write about each other’s problems — most notably and in the main quite respectfully in Business Standard and The Mint. However the headlines and slugs have included, “Family Fight’, ‘Family Matters,’ ‘The Hindu battles to transform.’ Expressions such as 'beleaguered' have also been used.

We agree that the discussion, dispute and even the court cases are about change and transformation of the reputed family owned newspaper. The main issue is who will lead the transformation of the third largest circulated English daily in the country. The transformation is necessary if the The Hindu is to stand up to Bennet Coleman’s Times of India which has already made an impact with its Chennai edition and will soon add to its South India campaign with three new editions in Kerala in cooperation with Mathrubhumi. Meanwhile The Hindu continues to call itself India’s national newspaper without having editions in the major metros of Mumbai and Kolkata.

Transformation goes beyond new editions or contemporary design — it implies innovation, futurism and the building of a new publishing paradigm which turns several technology and media threats  into a cross media opportunity. The organisation has a very strong production infrastructure which  is wasted on a paper that is crying out for editorial innovation and juice. The professionalisation of the paper’s editorial, design and business functions is overdue and cannot be limited to one appointment, albeit even the first non-family member to be appointed as editor. Transformation will require many steps which have been stayed for a variety of reasons not by the court but by the dysfunction and inability of the owners to congenially map out and implement the plans for change.

It is apparent that in the Kasturi and Sons dispute, one side believes that only they can lead the transformation. This side not only wants to professionalise the paper but also wants to retain some kind of editorial control — ideological and political. Currently enjoying a majority of 7 to 5 on the board, this rival group wants to get rid of N Ravi and Malini Parthasarathy on the editorial side and is largely using the appointment of a professional editor as an excuse to deprive Ravi and Parthasarathy of the responsibilities and power that would have naturally and sequentially come to them as educated and experienced editors as well as part owners of the group’s publications.

While the Company Law Board in its order on 20 May 2011 gave relief to N Murali and restored his responsibilities as Joint Managing Director, it has postponed judgement on whether the 7 to 5 decision of the Kasturi and Sons board to throw out all the family editors including Ravi and Parthasarathy amounts to oppression and whether a special resolution calling for more than a simple majority is needed. The real issues are of editorial control and of who leads the transformation and who ultimately wields power in the process of the company’s growth as a newspaper business. Put simply, transformation may mean taking on Bennett Coleman and bringing in new investment. At this juncture, it may behoove the owners of Kasturi and Sons to remember that newspaper owners have to choose between fame, power and wealth. According to a sage editor, newspaper owners can aspire to any two of these at best, but not all three. 
                                  — Naresh Khanna (June 2011)

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