Media bubble burst in Bengal
By Ashis Biswas
A sudden meltdown of the chit fund business and investment activities that have flourished in West Bengal, has landed the ruling Trinamool Congress (TMC) in deep trouble ahead of the panchayat polls.
Several daily newspapers in Bengali, English, Hindi and Urdu, along with a few TV channels have suddenly gone out of business, leaving nearly 1000 people in various capacities jobless. Most were owned by the Saradha group, a chit fund organisation that had its footprint in construction, tourism, education, plantations, real estate and other spheres also.
The papers and the channels, it was common knowledge, had not been run professionally over last 39 months or so. As former employees now admit openly, there was virtually no effort made either to increase circulation attract advertisement revenues. Most publications were not really visible in the market. To this day, no one can say what was the circulation of these “dailies.”
However, that did not come in the way of a section of the top tier employees in the media division of the group earning by Indian standards, unusually high salaries. The emoluments earned by some had no relation to their professional experience or expertise. Most media analysts were aware that the papers along with their employees were heading for trouble and issued warnings. But ruling TMC leaders paid no heed.
How does the TMC come into the picture? The ruling party’s involvement into the media venture of the chit fund organization was deep and multi-layered. According to current reports, it was on the instruction of the TMC leaders that Sudipto Sen, head of the Saradha group, appointed the TMC Rajya Sabha MP and working journalist, Kunal Ghosh as the CEO of the media division. Sens relatives incidentally had been running a chit fund business for some years.
Ghosh’s appointment caused eyebrows to rise at the time, because he was already a full time employee with the established Bengali daily ‘Pratidin’. This meant that in effect Ghosh was at best a part timer in the Saradha media division, yet he had been made the group CEO! Also, he continued to file daily reports for the papers and send bytes to TV channels, while attending house as a Rajya Sabha MP, a clear case of conflict of interest. A Delhi-based senior journalist told this scribe,”The practice is unheard of. People should immediately draw the attention of Rajya Sabha authorities.“
However, ruling TMC circles saw nothing unusual in such unorthodox if dubious practices, so long as their main objective — ensuring friendly publicity for themselves in both the print and electronic media, along with some slanted coverage of the opposition parties — was fulfilled. The other reason was Ghosh’s proximity to the Chief Minister Mamata Banerjee, which manifested in her decision to make him an unofficial spokesman for the party and include him in most of her programmes.
Meanwhile the activities of chit fund companies in West Bengal continued unchallenged. Despite repeated warnings from the central Finance Ministry, the RBI and SEBI authorities, the state government did not take any steps to protect innocent people from investing in such funds and getting duped. Over time, Congress MP Abu Hashem Choudhury and TMC MP Somen Mitra complained to the Prime Minister and the Union Finance Minister about the growth of the chit fund business in the state.
In other states, governments had started a crackdown against the fraudulent activities of such companies. There were arrests, many offices closed and legal action taken against some groups. In East India, the Saradha group’s activities came under the scanner in Assam .Over time, its offices were closed, some personnel arrested and its activities stopped.
The exact amount of funds taken from common people lured by the prospects of earning high interest from their deposits in Bengal may not be known. A year ago, it was estimated that chit fund organizations had amassed not less than Rs 15,000 crore from the state. Simultaneously, there was a steep decline in the small savings conducted by Post offices in the state where contributions from West Bengal were always remarkably high.
It was not just the Saradha group. The Union Finance Ministry and SEBI identified over 70 groups active in the state, collecting money. Gradually complaints on non payment and violations of commitment started coming in.
The situation became uncomfortable for chit fund operators from last year or so. With the TMC pulling out of the UPA II Ministry, there was no protection for the operators. Their business in other states had come a cropper. The centre had been reluctant about stepping in hard against them because of the Congress dependence on the TMC, but the times had changed. To drive its message home, the centre also tightened the screws against Alchemist group, which incidentally enjoyed close links with the TMC.
TMC insiders admitted that some local chit funds companies also acted as a source of financial support, officially or unofficially for the TMC. Once, a company came to help the state Government meet its financial commitment to foreign footballers during a Sports function. Now with the cash flow drying up and people becoming increasingly reluctant to invest, a direct outcome of the centre’s pressure, the crunch could be felt at all levels.
As things became tougher, maintaining the white elephant media division became a big problem for Sen and his colleagues, who informally warned their employees of bad days ahead. For the last few months, many employees were not being paid their salaries, until the day of the closure was announced just before the beginning of the Bengali new year.
As employees seek new jobs in the background of a dismal economic situation in Bengal, TMC leaders have their work cut out. Party General Secretary Mukul Roy has promised help, so has the Chief Minister. The search is on for a new financier, but given the present situation, the problem may not end soon.
More worryingly for the TMC which is now pressing for the arrest of Sen for non payment of dues to workers, the party is now virtually without much media support. Most of the strong TV channels which attract big audiences and the popular papers in Bengal are openly critical of, if not hostile to, the TMC. The state government had a policy of backing only the “friendly” media with advertisement and other support. This had not gone down well with established papers. Now most of this “friendly” segment has suddenly gone out of business, at a time when the panchayat elections are at the doorstep and the Lok Sabha polls may not be far away! [IPA]