SHARANYA KANVILKAR writes from Bombay: A nice little question mark hangs over Times Private Treaties, the controversial investment arm of The Times of India group, after India’s stock market regular yesterday barred 230 persons/entities from dealing in the securities market following their “prima facie” involvement in a forgery scam involving Pyramid Saimira Theatre Limited, an entertainment company which owns movie halls.
Pyramid Saimira is a Times Private Treaty (TPT) client—and one of the 230 persons/entities barred is Rajesh Unnikrishnan, an assistant editor of The Economic Times, the business daily published by The Times group.
Those debarred, including the two promoters of the company, were allegedly involved in forging a letter in December last year and passing it off as a letter from the Securities and Exchanges Board of India (SEBI) to manipulate Pyramid Saimira‘s stock, resulting in subtantial losses to investors.
The forged SEBI letter, asked one of the promoters P.S. Saminathan, chairman and managing director of Pyramid Saimira, to make an open offer for an additional 20 per cent stake at a price not less than Rs 250 at a time when the company was quoting around a fourth of that price.
The other promoter Nirmal Kotecha had sold over 15 lakh shares on Monday, December 22, the day some newspapers published a story based on the forged letter.
The Economic Times‘ Unnikrishnan, according to the SEBI order, played a key role “played a key role in the forgery, dissemination of information and misleading the media to believe its authenticity”, along with Rakesh Sharma, then an executive with the PR firm, Adfactors, who helped circulate the forged SEBI letter to three of his friends in the media.
In 2008, Adfactors and The Times of India group together floated a public relations firm called Tatva, a 67:33 joint venture between the PR firm and the newspaper.
According to SEBI, Rakesh Sharma of Adfactors and Rajesh Unnikrishnan of ET were colleagues at Business Standard.
“These persons/entities prima facie have been found to have played a key role in the forgery, dissemination of the information contained in the forged Sebi letter to the media and misleading the media to believe the authenticity of the information that was circulated to them. They also derived illegal profits,” SEBI said in its 54-page order.
According to the Sebi order, the tower location of the mobile telephones used by Sharma, Kotecha and Unnikrishnan indicated the three met on December 20, around the time when the forged letter was circulated to the media.
Sharma, whose service was terminated by Adfactors on December 23, had in a statement to SEBI which he later retracted, also admitted that Unnikrishnan and he went to Kotecha’s residence to mail the forged letter to “media friends.”
Asked for a comment by Indian Express (which owns Financial Express where Rajesh Unnikrishnan worked earlier), on the involvement of a staffer in the scam, Rahul Joshi, executive editor of The Economic Times, said:
“We have seen the order. We are studying it.”
In an article on the ethics of the private treaties, India’s most famous business investigative journalist Sucheta Dalal, a former Times employee, had quoted from a 2007 letter from Rahul Joshi to his colleagues:
“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.”
The Private Treaties, in which The Times Group picks up stakes in up and coming companies in return for guaranteed advertising and editorial exposure, has been a contentious affair in the company, and contributed to rumours surrounding the resignation of The Times of India‘s then executive editor Jaideep Bose aka JoJo last April.
The Economic Times carried an ET bureau report of the debarment of Rajesh Unnikrishnan, calling him an “employee” of ET but without referring to his editorial duties.
There was no mention of the scandal in The Times of India.
The Times group’s main competitor in Bombay, DNA, played a key role in unearthing the scam, with DNA Money special correspondent N. Sundaresha Subramanian churning out story after story.
Photo montage: courtesy DNA
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