Apr 28, 2009

Indian Media Scam - Private Treaties

By now you must have read about the Pyramid Saimira Scam. For the starters the story goes something like this. The promoters of the company, PS Saminathan and Nirmal Kotecha wanted to offload their stake in this company. So they conspired with the Assistant Editor of ‘Economic Times’ Rajesh Unnikrishnan to jack up the prices and demand of the stock so that they could offload it.

Together with this senior journalist promoters published reports on December 21 and 22, 2008 that SEBI had ordered Promoters to make an open offer for an additional 20 per cent stake in Pyramid at a price not less than Rs 250 per share within 14 days, for allegedly violating creeping acquisition norms. At that time the stock was trading at Rs 60. Following more recommendations from the journalist the stock shot up since promoters were to buy a Rs 60 stock at Rs 250 everybody started buying. The promoters and Economic Times Asst Editor were laughing all the way to the bank as they offloaded huge stake in the company.

But SEBI was surprised. Following investigations, SEBI found that the forgery was done to manipulate the stock price of PSTL and Nirmal Kotecha was one of the major beneficiaries and Economic Times Editor connived in this. All have been debarred from trading.

I never trusted promoters and offloading their stake always bothers me. But I am more surprised by the role that Assistant Editor of Economic Times played in this whole scam. Come-on we read this business daily. Should we no more trust on what it says? If as an investor you look forward to it for unbiased comments on the companies then sorry, Times Group papers is the wrong place.

You should know about the Times Group ‘Private Treaties’ service. Private Treaties is a pact between the Times of India group and approximately 100-odd companies, under which Times Group buys shares of some small companies. The list is expanding rapidly. The share purchase money is immediately taken back against the promise of guaranteed advertising in Group publications—to build the investee company’s brand(s). So for Times Group to gain from appreciation in stock value the brands have to be built, so there has to be the positive coverage on the companies always.

Unfortunately Pyramid Saimira Ltd.was also a Private Treaties client of Times Group. The name still appears on the clientlete list on their website. Check at www.timesprivatetreaties.com/portfolio/list-as-per-industry.html

MoneyLIFE, a website has in its possession a document to prove that Time group journalists are being designated as “champions” for Private Treaties clients to tailor editorial coverage to enhance the value of these companies and Times group investment.


An e-mail by The Economic Times editor Rahul Joshi (dated 29-Nov-2007) says:

“At ET, we are carving out a separate team to look into the needs of Private Treaty clients. Every large centre will have a senior editorial person to interface with Treaty clients. In turn, the senior edit person will be responsible, along with the existing team, for edit delivery. This team will have regional champions along with one or two reporters for help—but more importantly, they will liaise with REs (Resident Editors) and help in integrating the content into the different sections of the paper. In this way, we will be able to incorporate PT into the editorial mainstream, rather than it looking like a series of press releases appearing in vanilla form in the paper.”

In the past two years, Times Group has invested over Rs. 2,000 crore in 114-odd companies in diverse businesses. (Check website www.timesprivatetreaties.com)

Typically, the group buys a 5%-10% stake in mid-sized companies which plan an IPO. The company agrees to invest an equal amount in advertising in Times publications over a three-to-five-year period at a steep discount to the normal advertising rates.
Most companies that sign Private treaties are planning public issues, selling expensive realty projects or looking for private equity. All of them are looking for publicity and an assurance of POSITIVE Editorial Coverage. For the Times Group, it is a double bubble. First it gives Significant Capital Appreciation and tax-free income (since there is no long-term capital gains tax)—on the other hand, advertising revenue is fully taxed.

Here are some of the Clients of Times Group Private Treaties on which you will never hear a bad news.

  1. Deccan Aviation
  2. HDIL Ltd.
  3. Rajesh Exports Ltd
    Sobha Builders
    India Infoline
    Emaar MGF
    Amity Education
    Vishal Retail Pvt Ltd
    Zicom
    Ezeegol.com
    Bartronics Ltd
    Paramount Airways
    Almondz
    Future Group

Do you think that you will ever read negative articles about these companies in Economic Times? Economic Times is the most read business daily in India. A lot of people including Fund Managers make investment decisions based on Economic Times. It is one of the biggest conflicts of interest and a major sham which Times Group has been running. And so yesterday I changed my newspaper.

Post Script: Well Bartronics Ltd is also in the list about which I had expressed concerns in my blog in Feb Read Story here. A lot of people had commented that falling promoters stake is not a concern. Well to update you all on demand by SEBI promoters have released the number of shares they have pledged. Go to BSE website check out it seems that in Mar-09 quarter they have pledged each and every share they owned !!

19 comments:

  1. this is indeed shocking.

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  2. toi is toilet paper of india

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  3. Stop this blog or face action from Times group. A warning for you

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  4. Fuck your warning times group.Anand jain in gay and Indu jain likes it up the back side.Your time is up times of india.People like you deserve to be in the dustbin,not on my table.Changed my paper today.

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  5. Times group has removed the list of their 'Treaty parteners' from their website.Hindustan times,tv 18 etc are also running a huge scam like this.Here is the list of Times group criminals.Awaken people!!You have been robbed and SEBI is sleeping as usual.Its time for each man for himself.This is a systmeic disease.
    Here is the list...
    Access Atlantech
    ACE
    Adrenalin Esystems
    Aegon Insurance
    Aerens Goldsouk
    Affle India
    Air Deccan
    Airex
    Alchemy
    Allied Digital
    Amity
    Amrapali
    Apollo Hospitals
    Archies Limited
    Asia Cryocell
    Asipac Projects
    Assotech
    Avestha Gengraine
    Bajaj Hindusthan
    Bartronics
    Bath Concept
    Bhagyanagar
    Bhavika Collections
    Birla Power
    BSE
    Career Forum
    Celebrity Fashions
    Collage Group
    Confident Group
    Cosmo Aviation
    Cream Bell
    CRI
    Cybele
    Dixon Technologies
    DSE
    E-Yantra
    Easy Bill
    Emaar
    Flawless Diamond
    General Motors
    Gitanjali
    GTL
    Hakoba
    Hanung Toys
    HDIL
    Holiday IQ
    ICRI
    IIHT
    India Infoline
    Indiamart
    Indian School of Business
    Indus League
    IOL Broadband
    JC Biguine
    JHS Svendgaard
    Karaturi
    Khadim
    Kinetic
    KLJ Town Planners
    Kuoni
    Liberty Whiteware
    Lodha
    Lok Housing and Constructions
    Loyalty Solutions
    LT Overseas
    LVMH
    MCX
    Media Video
    Meriton
    Micro Technology
    Mindlogicx
    Niknish
    Omaxe
    Osian
    Pacific Clothing
    Pampaered Home
    Pantaloon
    Paramount Airways
    Percept Pictures
    Piramyd
    Pyramid Saimira
    Premier Tissues
    Provogue
    Pushpanjali
    Raja Rani
    Rajesh Exports
    Refex Refrigerants
    Richfeel Health
    Runwal
    Sahara One
    Satnav Technologies
    Seed Infotech
    Shree Ganesh
    Shweta Buildwell
    Sleep-Ins
    Sobha Developers
    Spice Mobiles
    SQL Star
    SR Foils
    Sujana Group
    Sumeet Industries
    Supertech
    Teledata
    The Home Store
    Thyrocare
    Timbor
    Today's Writing
    Travelguru
    Travel Tours/Travel Air
    Travelmasti
    Unibic
    Unitek Power
    Uptec Computers
    Videocon
    Vishal Retail
    Wockhardt
    Worldphone
    You Broadband
    Zak Trade Fairs
    Zicom
    EMS

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  6. Shame on you Times Of India Group..!!!!

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  7. Another Times of India promoted company is now in scam

    HDIL did not report 350 crores of Income and tried to cheat government of 110 crores rupees in taxes.

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  8. Why dont you nuts get into direct 'DAKUGIRI' ? why this indirect route of looting the hapless middle class guy , maybe a poor school teacher , a postman , a clerk etc.? you jokers are actually thieves and should be handled like ordinary pickpockets , i.e brought to the cop station and given the usual 'police treatment', Only this will stop you from inventing new methods to cheat and never be caught SHAME , SHAME and to top it all, many of you at TOI walk around in the garb of sadus and sanyasis ! limit to cheating !., You sold 'soft porn' first via the 3rd Page and as if not sufficient you have got down to this methiod of cheating, shame shame !

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  9. This must be taken up further !!! Media is supposed to be a pillar of democracy .... It is shameful....Never believe the conventional media....try to look for facts elsewhere....

    India desperately needs free press but does not have any.....we're still slaves of the same nexus that we were before 1947, only that it is covert control now.

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  10. The following report provides investors an nsight and a real guide into the smart card industry in India. All reputed companies give the segment wise contribution break up to the top & bottom line, so kindly be aware of all such companies avioding disclosure of segment contribution.

    1. SYSCOM
    2. UNITED TECH SA
    3. MANIPAL CARDS TECHNOLOGIES
    4. MTECH INNOVATIONS
    5. CARD SOLUTIONS INC
    6. MADRAS SECURITY PRESS
    7. SEIPMANS
    8. EAST COM PEACE
    9. INCARD ITALY
    10. Gemalto
    11. Oberthur cards
    12. G & D
    13. Bartronics India Ltd
    14. Watch Data

    Companies from 1 to 9 command a 70% market share and Gemalto and Oberthur have a market share of 27% and G&D / Bartronics have 3% market share, NOTE: G&D SUB CONTRACTS ALL MANUFACTURING ACTIVITIES TO BARTRONICS.

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  11. Anonymous @Feb 14

    What is the source of this information?
    Which report are you referring to?

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  12. TOI is so greedy...its unbelievable!

    Just go to their website and you will see ... they have more space devoted to Ads and less to news.

    I hate their croony audio visual Ads popping up now a days which come up right in your face where you're trying to read news which cover about 75% of space. When you're so engrossed these come up all of a sudden and some times I have been so jarred by them. Even closing them requires two clicks. I started reading epaper to get rid of this and now a days they have started charging for that for people in US!!!

    I HATE TOI! I have switched to Hindustan times! Get their epaper for free as well.

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  13. EXCELLENT!

    Well done... Blog is bookmarked and shared.

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  14. why is this blog not functioning now a days...request the author to continue his posts.we are here to support you.

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  15. Iam shocked to see this.i have bought many stocks after seeing the recommendations from TOI and ETI

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  16. good job , please keep writing it is very importent for world to know that the biggest terrorists and hypocrates are indians - upper caste

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