New Delhi: The stalemate at Kasturi and Sons Ltd, the company that publishes The Hindu and The Hindu Business Line, continues after the Company Law Board (CLB) on Friday morning ruled that decisions on major internal changes taken at meetings later in the day could not be implemented for now.
Simultaneously, N. Ram, editor-in-chief of The Hindu, defended the editorial integrity of the family-owned newspaper against allegations by his relatives over biased coverage of the alleged wrongdoing in the allocation of second-generation (2G) telecom spectrum.
Ram’s brothers, N. Ravi and N. Murali, along with their cousin Malini Parthasarthy, had alleged that the paper tried to protect former telecom minister A. Raja, who has been charged with corruption in the allocation of spectrum.
Ram, who enjoys a seven-member majority on the 12-member board, has sought to alter the basic internal structure of the 132-year-old newspaper by bringing in a professional editor who is not a part of the family, among other changes.
Five board members are resisting the changes, which include the removal of family members as editorial directors. Murali, one of the five dissenters and Ram’s younger brother, said he was not willing to allow a fundamental change without the unanimity of the shareholders, an unlikely eventuality according to people close to the family.
“Such a basic change in the structure of our company cannot be done without a shareholders’ agreement and amendments to the articles (of association),” he said.
But for now, CLB member Lizamma Augustine, who had reinstated Murali’s powers as senior managing director in a recent related petition, seems to share the view that a break from tradition without a significant backing of the family, is a bad idea.
“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,” said her order delivered on Friday.
All key editorial and managerial positions have traditionally been held by members of the family.
She also observed that the board had not considered aspects referred to in her earlier order, which deal with succession, exit norms and other matters pertaining to the role of the family in the business. CLB will fully hear the matter in August.
This means that Siddharth Varadarajan, national bureau chief of The Hindu, will not be appointed editor for now, although an extraordinary general meeting, which took place later on Friday, saw over 60% of shareholders vote in favour of this move, according to a press release from Ram.
He also rejected allegations made by rival family members that the paper’s coverage of spectrum allocation had been biased.
“The plain facts, some of which I have already made public, show the allegations to be false and absurd,” Ram said in an emailed note. “Let me assure you that while we value our advertisers, news coverage in The Hindu is not linked, directly or indirectly, to advertising, a fact widely acknowledged in the industry where such linkage is indeed known,” he added, referring to the charge that the paper had received an advertisement in exchange for 2G coverage favourable to Raja.
Mint and the Hindustan Times, both published by HT Media Ltd, compete with The Hindu group’s publications in some markets.