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BW Businessworld

Exit Strategy

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The Dainik Bhaskar Group (DB Corp.) is probably exiting Diligent Media Corporation, the joint venture between the DB Group and the Subhash Chandra-promoted Essel Group that publishes the daily newspaper DNA. With this, Chandra and his associates will have 100 per cent ownership of Diligent Media. A senior Essel Group official confirms that an in-principle agreement had been reached for the DB Group to exit from the joint venture. "When there are two strong players, both cannot be in the driver's seat," says the Essel official.

Management and editorial control over Diligent Media was passed on to Essel Group and its promoter Chandra in 2009. Earlier, DB Group's Sudhir Aggarwal had held the reins as the managing director of Diligent Media. A covenant between the two partners had settled on a rotational model of management control for DNA. Both partners now concede the 50:50 business enterprise run with shared management control was fraught with problems.

There have been speculation for some time that the DB Group has been slowly but deliberately easing out of the partnership. Sources reveal that the Aggarwals, the promoters of the DB Group, had earlier sold a significant stake to Subhash Chandra and his associates in September 2011, making the Essel Group majority owners by a substantial margin. Reaction from the DB Group on the issue of exiting Diligent Media was that the "deal was yet to be consummated". While Girish Aggarwal, director of the DB group, terms it "premature", another executive says no such thing is happening.

Diligent Media is believed to be losing Rs 12-14 crore a month. Bhaskar officials say the group wanted to ease out of the crowded English language metro market as there was little hope of being No.1 or No.2. Being at the bottom of the heap, it is difficult to garner advertising revenue, they say. Alternatively, the DB Group is focussing on "growth markets" (Tier-2 and Tier-3 towns). Its recent launches of Divya Marathi were in centres such as Aurangabad and Nashik.

Chandra and the Essel Group are, on the other hand, gung-ho about DNA. "There is a big opportunity in the space for English language dailies, and we intend to fully exploit that," says the senior Essel executive. He rejects speculation that the Essel Group is keen to launch a Delhi edition in the near future; he says the company is keen on consolidating and building its Mumbai and other editions.

Complaint Against Network18 Before Sebi
for the news story on network18 titled (‘a new headache For Raghav Bahl', BW, 5 March 2012) we had sent a short questionnaire to Raghav Bahl. No reply was received till the news pages went to press on Thursday evening 23 February 2012. However, we received a reply the next day, Friday, from Kshipra Jatana, EVP & legal head of Network18 Media & Investments, as given below:

"We are not aware of any complaint filed by Victor Fernandes before Sebi. The suit filed by Victor Fernandes is currently pending in the Bombay High Court. We have been advised by our legal counsels that Victor Fernandes has a very weak case...

The notice of motion filed by Victor Fernandes in the Bombay High Court seeking interim relief that all businesses should to be conducted through e18 has been dismissed by both the single judge and a division bench of the Bombay High Court. Victor Fernandes has not filed an appeal against the dismissal order in the Supreme Court."

(This story was published in Businessworld Issue Dated 12-03-2012)