One Cheer for Transparency?  

September 7, 2010

Corporate India loves private treaties with media houses. As they get insurance against negative publicity. But, this also raises issues of ethics

The truth is that corporate India loves private treaties with media houses. After all, who doesn’t want a 50% discount on advertising and an insurance against negative publicity in the biggest media houses in return for giving a small shareholding to them? But this also raises obvious issues of ethics. At least two of SEBI’s past chairmen talked about media ethics towards the end of their tenures but did nothing concrete about it. One SEBI chairman bagged awards from two of the biggest media houses which notoriously transgress ethical boundaries for news. Probably by coincidence, the awards came after he initiated a debate on disclosures.

This time again, the SEBI communiqué mandating disclosure of private treaties comes at the end of a chairman’s term, which means its implementation will be someone else’s headache. How exactly will compliance be ensured or non-compliance punished? SEBI is silent on this crucial issue. It only says that brand building strategies of media groups, without adequate disclosures, may not be in the interest of investors and financial institutions and wants them disclosed on the websites of media groups. Well, the group that pioneered ‘Private Treaties’ already does this, but the average person can rarely make the connection or remember the long list of 110-odd private treaty companies.

SEBI suggests it is implementing a Press Council recommendation, but the Council itself is a toothless body which is largely ignored by media houses. At least four media groups that do private treaty deals but pretend to be ethical, are all listed entities. It will be interesting to see if SEBI enforces its disclosure at least with them. Finally, let’s not forget that regulators and self-regulated entities effectively use their considerable advertising budgets to ensure uncritical media coverage even without formal treaties or shareholding. Will SEBI act on these too? — Sucheta Dalal