TV9 distances itself from Kolkata TV on liquidation process

TV9 distances itself from Kolkata TV on liquidation process
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First Published: Tue, Sep 29 2009. 09 36 PM IST
Updated: Tue, Sep 29 2009. 09 36 PM IST
Kolkata/Hyderabad: Hyderabad-based Associated Broadcasting Co. Pvt. Ltd, which runs the TV9 news channels in Andhra Pradesh, Karnataka, Gujarat and Maharashtra, seems to have washed its hands of embattled Bengali news broadcaster Kolkata TV, in which it had acquired an 86% equity stake in January 2008.
Associated Broadcasting’s directors had first distanced themselves from SST Media Pvt. Ltd—the firm behind Kolkata TV—by stepping down from its board in December.
Thereafter, when creditors launched liquidation proceedings against SST Media at the Calcutta high court, Associated Broadcasting chose to stay away from it, allowing a Kolkata-based businessman backed by the Trinamool Congress— West Bengal’s main opposition party—to wrest control of the channel.
When Associated Broadcasting acquired 86% of SST Media’s shares in January 2008 for Rs25.12 crore, Kolkata TV was among the most watched Bengali news channels. But the channel went aground because it “couldn’t generate enough revenues”, according to SST Media’s founder and its former managing director Tathagata Dutta. SST Media’s current liabilities are Rs60-70 crore.
Although Associate Broadcasting, which was launched by Srini Raju—brother-in-law of Satyam Computer Services Ltd’s founder B. Ramalinga Raju—had the majority stake in SST Media, Kolkata TV was run by Datta, who was also the channel’s editor.
M.K.V.N. Murthy, Associated Broadcasting’s chief financial officer, said there was no role for his firm to play immediately. “TV9 was not kept in the loop on the liquidation proceedings.” However, on completion of the legal proceedings, Associated Broadcasting would decide how to secure its interests in Kolkata TV, Murthy added.
Asked if Associated Broadcasting could have done anything immediately to secure its equity interest in Kolkata TV, a senior Kolkata-based lawyer said it would have had to “face the creditors” if it had opposed the liquidation proceedings. “It seems TV9 doesn’t want to take any responsibility for Kolkata TV’s liabilities,” added the lawyer, who did not want to be identified because he was representing one of SST Media’s creditors.
Associated Broadcasting was “clearly intimidated” by Kolkata TV’s liabilities, a former employee of SST Media said on condition of anonymity. “You can launch a new channel with Rs15-20 crore... Why should TV9 take responsibility for Rs70 crore liabilities?”
SST Media would have been wound up under an order of the Calcutta high court unless Kolkata TV’s employees had on their own appealed the wind-up order passed on 21 May. They approached the Trinamool Congress, which, in turn, persuaded Kaustuv Ray, an entrepreneur with diverse interests, to financially support Kolkata TV’s employees in running the channel.
In an order passed on 1 September, the Calcutta high court said that its official liquidator had found SST Media’s “physical assets were of insignificant value” compared with its liabilities, and that it was “in the interest of commercial creditors” as well to consider a revival plan.
“I do not think the interest of the creditors would be served at this stage in the event the company (SST Media) is directed to be wound up without making any further effort for revival,” judge Aniruddha Bose said in his order.
Ray, whose RP Group manufactures personal computers under the Chirag brand and produces television software, has started paying salaries to Kolkata TV’s employees and cleared some of SST Media’s dues. The channel, which went off air in the first week of May, has also been relaunched.
Some three months ago, Ray had offered to acquire Associated Broadcasting’s stake in SST Media, but the Hyderabad-based firm spurned his offer. “We summarily rejected the offer as we found it not at all attractive,” Murthy told Mint, alleging that Ray had illegally seized control of the channel’s office “using political clout”.
Asked about his interest in Kolkata TV, Ray said his group was supplying software to Kolkata TV like it does to many other television channels. He refused further comment because the matter is under court consideration. However, he had earlier told Mint that he owns Kolkata TV’s Park Street office. According to Ray, he had reached an agreement to acquire the property in October last year, and SST Media was one of his tenants.
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First Published: Tue, Sep 29 2009. 09 36 PM IST