radiaSRT/srt/49 Srinath Narasimhan Jun 13 2009 10 58 49.srt

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...phone rings...

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Niira: Hi Srinath, sorry...
Srinath: (inaudible) meant to call...
Niira: Ya, ya....So...

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Srinath: I spoke to Shankkar after you spoke to him that day, and he said 'Look, tell them that the answer is no'.
Niira: Hmm.
Niira: Nobody's spoken -

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Srinath: I'm basically deciding to issue something internally, because that's the more important thing for me right now. Customers and employees (?)
Niira: That's right. But Srinath, the thing is that we're going to have to take some steps, otherwise, what's going to happen is they are just going to get away with it.
Srinath: Right...
Niira: And they'll carry on doing something. So I said to Senthil that we'll be forced to write to SEBI.

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Niira: I said - 
Srinath: How will SEBI help us? SEBI can do nothing.
Niira: No, you see, the thing is that SEBI will simply investigate 2 things - One - you see, your stock's been getting the circuit. It was up what - 10-14% in 2 days. 
Srinath: Hmm...

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Niira: My only thing to share was...yesterday, before SEBI writes to you, it's best you write to SEBI - and say that...you know, everybody does this. I've had all companies including ICICI....

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Niira: (?)... Journalists have a tendency to spread malicious... They need to investigate the nature of the nexus to ensure that there's no foul play.

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Srinath: Yeah, the only thing that I worry about getting suddenly into it, given that we're NYSE listed, I have to do the same with SCC as well. It opens up a completely different can of worms for us.
Niira: (inaudible)
Srinath: Complicates things a little bit more...complicated things for us.

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Niira: ... NYSE?
Srinath: The NYSE listing even complicates things for us.
Srinath: If I write to SEBI,.... I have to write to SCC as well. Then it opens a complete can of worms.... I'm kind of going to somebody else and saying 'come and investigate all this'.

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Niira: Then why can't we issue a notice to the company- I mean to the channel, through the company? Or say that we will take legal action unless you issue an apology on air, because this information was incorrect.
Srinath: Yes, but again, that's one thing we should look at.

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Srinath: The other thing which is very strange is, the impression that I got from Rashmi for example is all about the group. And how the group has to come out with a statement saying that this is what we are looking at. That's also part of the column. Sunil Mittal's comment has been vague. The group hasn't said anything. So it kind of leaves everything in limbo. And the company can stand up and say anything. But ultimately it's also saying there's a shareholder-to-shareholder discussion. It's not even resolved in the company.

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Niira: No, no. But it's the company's reaction. You see, the company has to react, Srinath.
Srinath: Company can react, but I can't say that the share holders are not talking. I don't know.

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Niira: No, but the company can say that the information is incorrect. That is sufficient.
Srinath: I can talk about the cable story (?) incorrect.....But how do I say for example that the first ET story for example is not about cable? So basically you're saying TATA's are looking to sell.

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Niira: But they're not....
Srinath: No but...
Niira: I can ask Chris to also issue a statement.

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Srinath: Where I'm coming from is, to me, it's one thing to issue a statement saying the company is not selling. But effectively it's better for the group to issue a statement saying 'we're not talking'. That's a better statement. I can come to the cable story and say 'look, we're not selling our cable'. That's very easy for me to do. That's a factually correct statement as well.

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Srinath: Where I'm coming from is that, they're very clearly saying 'group is discussing, principle to principle discussion', my issuing a statement doesn't mean anything.

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Niira: This CNBC story yesterday, was on Undersea Cable right?
Srinath: Cable. Cable only.

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Niira: So, you should write ...
Srinath: You should go after CNBC factually on what they're saying. Very clearly saying that the statement that they are making about us looking to divert our cable (?) is unfounded. We are not looking for something.
Niira: Correct. So I think... As long as you do that to CNBC, and you demand an apology from them on air, that your story was wrong and we want you to apologise. Failing which, we'll take steps against you.

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Srinath: Okay. Let me put ...
Niira: Okay, because I think....Srinath I can't leave it here.

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Niira: Because yesterday there was a play. It started from 10 o'clock in the morning on CNBC. And it continued. And the cheek they had was, we've spoken to both sides, you've seen that. Both sides have denied it. Sunil's statement, Sunil's reaction to me was, 'It's my standard statement that Niira today my daughter is getting married so please don't drag me into this today.' And literally ... he was in the middle of a marriage ceremony in the morning. So I think he would have corrected that statement saying that it was wrong. Maybe I can ask him also to write a letter to CNBC saying that you have carried wrong news.

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Srinath: But CNBC didn't ...(?) ET did.
Niira: Err....no. CNBC also carried a statement saying 'one of the suitors could be Bharti'. Siddharth Zarabi started with a statement saying 'Before I start the story, I'd like to comment on what both sides have to say. -And this is the statement that TATAs have said. And this is the statement that Sunil Mittal has said.' And then he raises his eyebrows and says 'he is not going to deny, or he is not going to confirm'.
Srinath: Right.

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Srinath: Basically they have (?) and this is what is expected from them. You can't expect anything more at this point of time. (?) I am scared until that result nothing will be done. That kind of a statement is what he made.
Niira: Yeah.

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Niira: Well he said that we don't comment on market speculation and therefore we'll neither confirm nor deny any of this report. It's a very standard statement they always put.
Srinath: Ya, ya. And it's very similar to what we put out as well.
Niira: That's right.

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Niira: So the thing is that I don't think that you can leave the ...I think the journalists in your letter should be named. You should say it's malicious, there's intent. And I think we should take steps if you do not apologise on air.
Srinath: Yeah, we can...again the issue is, if you want to take into a battle of that kind, then we're opening the front for ten more battles like this.

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Srinath: What I would rather do is put up a factual letter saying 'Please publish the following'. And deny it categorically. Our intention is to first get the facts right. What I'd like to do is to completely correct what these guys are saying. And to say 'from our stand point, look, this thing is completely unfounded'.
Niira: Yeah. Correct.

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Srinath: Because what he will counter and say very simply is 'I've been told by an investment banker', which is the crap he's been writing over and over again.
Niira: No, but the thing is that the company is not talking to an investment banker, then the investment banker can't be talking on his own, no?

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Srinath: But the company has categorically denied it. If you see what (?) statement has been put out, it is very clear.... No attempt to sell our cable has been stated. A very clear statement to it.... Cable I can talk very clearly. And I can talk very strongly and I can deny completely because we know we're not doing this.

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Niira: So let's just focus on the CNBC story.
Srinath: Yeah. Let's focus on CNBC. Let's look at exactly what we want to draft for these guys.

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Niira: But Economic Times today carried the story. I can't- In Delhi it's not appeared.

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Srinath: Say that again please?
Niira: No no... ET in Bombay has not carried has it?
Srinath: ET in Bombay I didn't see it, I didn't see any stories there.
Niira: No, they've not carried. Because Rahul has said to me that we spiked the story.
Srinath: Right...
Niira: But he called me after my email to him, and he said that Rashmi... and of course, Rashmi we never complained. It's Bodhisattva Ganguli who was pushing that story after... I spent almost 3 hours with him discussing this that day.
Srinath: Right...

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Niira: He kept on calling me back. 'I must carry the story. You can't stop me from carrying the story.' And I said, "Bodhi, why are you carrying only TATA's? Anil is selling 74% to AT&T. I haven't seen you carry that on your front page."
Srinath: ... Ya, they had?
Niira: They're talking 74%.
Srinath: Not bad.

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Niira: I got approached by AT&T to talk to Mukesh, not to come in the way of the transaction because they are very nervous of him. They don't want and they'd like to buy all 74% ...and if Mukesh can bless the deal.
Srinath: Okay.

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Niira: So I said 'I'm sorry, I don't get involved between the brothers. I don't want to get into this at all. Why don't you speak to him directly? And if there is a process on the (?), why don't you follow it? And ask Anil to disclose the (?) and you can follow everything and write direct to him.'

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Niira: He says no- I got approached by their lawyers. The AT&T's internal lawyers, saying that 'Can we'- ...this was on Thursday they approached me, and yesterday they met me. They're in Delhi. They're talking to RCom, they were talking to the regulators yesterday.
Srinath: Right.

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Niira: And the attempt is that he will sell and he will exit out 74%. Because you see he can't raise any more debt.
Srinath: Yeah, he's completely broke.
Niira: Yeah, he's in a financial crisis, and the only way he can do it. And therefore a 74% sale is quite a master stroke from his point of view.

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Niira: So I spoke to him...
Srinath: That's exactly (?)

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Niira: Yeah, but I spoke to Mr. Tata. I said there's 2 ways of looking at this. 1- we get rid of the menace. But when he remains 26% you still don't get rid of him, you know. At 26%, Srinath, we don't get rid of him no. He's still there.

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Srinath: But he would, I'm assuming, take a far lower profile. And AT&T would not let him do some of the things that he is able to do right now.

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Niira: No Srinath, they are as bad on their accounting...
Srinath: AT&T anyways is not very different.
Niira: They are not honest. You know AT&T...
Srinath: They are not.

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Niira: You know, Mr. Tata was telling me yesterday, that the way in the past these people have functioned. Where they've just paid off these guys, the offshore guys of AT&T. So anybody who does Anil's audit right now will not pass the audit. That's what happened with MTN. Because MTN saw that there was booking of bulk revenues and all that and there was a whole load of double accounting and fidging going on.
Srinath: Right.

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Niira: So I would imagine AT&T would know that.... So when I told the lawyer yesterday, I said- 'What are you talking about, this company has already gone for an independant audit. There is a whole challenge about it's revenues, it's bookings, it's been double accounting.'

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Niira: They said 'We know all that. It's perfectly alright. We know all that. Of course that's an issue of valuation and that will come up in the valuation, but we are very keen to acquire....'
Srinath: Right
Niira: '...So please talk to Mukesh.' I said I can't talk to him. I just spoke to Mukesh. I said 'Look Mukesh, they have come to me. I'm letting you know...'
Srinath: - But I'm not talking on your behalf.

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Niira: I'm not. His reaction was 'Absolutely right. -You tell them that if they want to talk to RIL or to me, they should write to me and follow process.' Why should we help them in any way at all?

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Niira: Because you make him larger than life, by giving him 26% - (?) - it's a big amount.
Srinath: No but I guess what he wants is he wants to keep his foot in the door. He wants to have a token in there.

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Niira: Srinath, now he'll get lots of money and then he'll use it against all of us.
Srinath: Ya, again. But atleast in some ways he will be out of the business of telecommunication.
Niira: I hope he does. I mean I was telling the AT&T guy 'I wish you could just buy him out 100%. Why don't you find another Indian partner to buy the other 26%?'
(laughing)
Niira: And he said 'Yes, I wish.'
Srinath: Makes sense.

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Niira: Ya, so Srinath, The thing is that my view is that ET is ...they are completely beholden to the ADAG group right now. There is a massive amount of advertising happening in Times Now and ET Now. ET Now is about to start as a new channel and these guys are making a huge commitment. We have never learnt to leverage our advertising well. 
Srinath: Correct. Correct.

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Niira: So I told this to Mr. Tata yesterday. I said 'I'm fighting a battle, bacause sometimes it's crazy, you know.'
Srinath: You have no ammunition.
Niira: Eh?
Srinath: You have no ammunition. Even the ammunition we have, we don't use.
Niira: We don't use it. And we've spent 840 crores on advertising every year amongst the group companies.
Niira: That's our advertising spend Srinath.
Srinath: Man, that's crazy!
Niira: Yeah, 840 crores is what we spend and 70% of that is electronic.

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Srinath: What would you want to do about the ET one. ET won't come in Delhi today, is it?
Niira: No, it's not come.
Srinath: Ok.
Niira: They put it on hold. But you see, I need to show the media to some extent, I need to let them know that we are taking action against CNBC. Because if I don't do that now, next time they are not going to stop a story. And we get on to the receiving end, Srinath.
Srinath: We become defensive.
Niira: yeah, we are becoming defensive, yeah. But next time they hear some other silly rumour, they'll just carry it, but we'll carry your denial also.

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Srinath: What is CNBC's trip. I mean clearly they've got a vested interest in this as well. What is their trip in this?
(pause)
Niira: Siddharth Zarabi is a complete ADAG guy.
Srinath: Right.

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Niira: Right. He would be... yesterday there was this whole AT&T thing. There was the whole issue about- there's another investment banker report, -the analysts reports that have come out against RCom. ADAG works on a brilliant strategy, which is always of deflection. So they put out the news which will really attract the telecom space. And...
Srinath: - and block everything out?
Niira: And everything else becomes secondary. So I think it was a deflection strategy that worked very well in their favour. And I said this to both ET and CNBC. I said 'You guys are idiots.' I can't believe this.

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Niira: Siddharth - I spoke personally to Siddharth. I said "Siddharth, are you crazy? Are you doing this - " Rohit and I were talking to him in any case. And finally I lost it and I spoke to Raghav in the end.
Srinath: And?
Niira: He said "Niira I didn't realise this." So I sent him a mail. He said send me a mail. So I sent him a mail saying that this is it.

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Niira: And then Senthil called me at about 9:30 saying "I'm sorry". I said "How can you be sorry? You just carried it again at 9 o'clock."
Srinath: Big deal. Yeah.
Niira: Because internally also have to answer to our employees no? This is not a fair thing.
Srinath: No but, are they going to carry it again today or tomorrow?
Niira: No no. I don't think so Srinath. But the thing is that it's now on the blogs, it's on the digital space.

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Srinath: But that's pretty low key now. Whatever I've seen so far is pretty low key. I tracked it last night and I tracked it this morning. It's not much.
Niira: No, we are already... because we spoke to all the publications and stopped the issue of the ...er...we stopped the story. We are not going to allow any publication to carry it.
Srinath: Right.

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Niira: But Srinath, my honest advice is that we need to be seen taking some steps so that they don't do it again.
Srinath: Right.
Niira: And tomorrow it could be something much more serious.
Srinath: Ya, just keep one thing in mind. I'm very cautious about these kinds of rumours. Largely because of (?) Nothing else. That's one of the things that worries me. If it was only SEBI I'd worry about a lot less. Because the rules are easier for us to handle. When you start opening these kinds of things in the US it has very different rammifications. That's the only thing I'm worried about.

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Niira: So maybe we can write to the channel. I think we should....
Srinath: We have a right to refute the story and say 'Look guys you printed something without a basis. And in all fairness we shared our side of the story. We are entitled to an apology.'
Srinath: That's the language we should be using. We are entitled to ask tht.
Niira: That's right.

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Srinath: What I should do is get our legal guys to properly draft something and say 'Look guys you can't make statements like this.'
Niira: That's right.
Srinath: And then release that later.

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Niira: And...and demand an apology on air, huh!
Srinath: Yeah.

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Niira: You must demand an apology on air.
Srinath: Have you got something which you've written to these guys before? So I can give (?) and use as the basis?
Niira: I'll send you something in confidance that RIL has written to them.
Srinath: No no no .. not at all.
Niira: No?
Srinath: (?) I can't give him that.

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Niira: Ok, I'll take out the jist, I'll take out the names, and I'll take out all that and send you the content.
Srinath: Yeah, that's fine. That's fine.
Srinath:  ...can use and say 'look I'm drafting it on this basis, and this is what we want today.'
Niira: Ok. I'll do that. I'll use the RIL...they've written .... er

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Niira: ...Right now we're fighting on an apology on wrong information, on another issue which came up in Forbes. Again, Network18... and Raghav's team. I don't know what's wrong with him. They've gone absolutely crazy.

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Srinath: What is this gas thing which you sent me this morning?
Niira: What had happened was, I'd sent Rahul a mail on gas, which was again incorrect reporting by ET. So the point I was making to him was that you keep on doing this, you don't stop. Again we talked about the fact that RIL has apparently said that there are no takers for gas.
Srinath: Ok.

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Niira: ...Which is like silly. RIL must have said there are no takers for gas?! I mean it's going to be the important thing from the energy sector!

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Niira: I can't believe where they get a statement like that from. So I'd taken it...
Srinath: (inaudible)
Niira: Ya. What I sent to him was 'Don't you guys have a mind of your own? Don't you understand how important gas is?' I can't believe it. They are just morons you know.
Srinath: Now we know why it's happening at least.
Niira: Huh?

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Srinath: I'm still struggling with this CNBC angle as to why.... Are they punting the market by any chance?
Niira: Yes, they are punting the market. There's an investigation with SEBI on. SEBI's already looking at Udayan, they are already looking at people like Siddharth. They are already watching Sajid and gang. They are all into profit-aiding. What does Amitabh Jhunjhunwala do? He has a style.

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Niira: His style is- 'I will tell you where you can buy... how you can make money.' So these guys get their wives involved in trading in stock.
Srinath: Oh wow!
Niira: What they end up doing is- Amitabh Jhunjhunwala tells them, 'If you don't have money, I'll give you margin.' So he starts to give them a lakh and he says, oh you can return it to me because if you don't have money...or he'll give them five lakhs, or he'll give them ten lakhs. And then they make money on profit, and then they give it back to him. This is a scam that's going on right now, and its...I know at least about 40 journalists who are involved in this through the ADAG camp.

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(pause)

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Srinath: This is crazy. I mean, they must realize that the consequences are ridiculous.
Niira: No but you see, what happens Shrinath, is that these guys are involved in SEBI, they've got good relationships with SEBI.

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Niira: At the lower levels they don't allow the files to move. You know, Bhave can order whatever investigation he wants. What happens at the lower level is that the guy finds that I didn't find anything. Because Bhave doesn't do the investigation personally. Unless someone does this inves-...and I think they're on it ...they've already done a lot of investigations on Pyramid Saimira which you saw that, again, ET got caught in. You know, that guy, Unnikrishnan.
Srinath: Right.

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Niira: So I have a sense that this is....and it is there... Unless your stock's being played or there are multiple stocks that are being played...I know that it happened on Unitech.
Srinath: Okay?

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Niira: They brought the stock down to 30 rupees, and then made the journalists buy it. R-Capital bought 150 crores worth of stock that day, and then took 3% ownership of the company.

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(pause)

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Niira: They literally hammered the stock so much that they brought it right down to 30 rupees. And Unitech had to go to the cops! To demand an enquiry. They went to SEBI.

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(pause)

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Niira: Sri, there is a play...it's a terrible thing and CNBC is on the forefront. Udayan Mukherjee is known to have...he files the highest tax returns amongst journalists. 
Srinath: Wow!

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Niira: I'm told his last tax return is 6 crores, is what he paid in taxes. I mean, he doesn't earn that.
Srinath: Not bad.... not bad.
Niira: Yeah.

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Niira: They are under check. But what I'm saying is that we shouldn't fall prey to this.
Srinath: Yeah, we can't let them get away with it. That's for sure.
Niira: Yeah...

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Srinath: ...(?) the right way to send a message to these guys.
Niira: That's fine. So even if we write to the channel...
Srinath: No then we get a (?) written on this one.
Niira: Maybe we can...
Srinath: We have a right as a company to refute something which we clearly believe is incorrect. And ask them to publish(?) what they had to say.

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Niira: But Srinath, maybe you want to consider, if you write to them, maybe you want to send a copy to SEBI, no?
Srinath: Let me check with (?). Let me ask him.
Niira: Okay. Alright. And if you want, I -

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Srinath: SEBI equal to SCC. Whatever I do with SEBI, I have to keep one hand in SCC as well. That's the deal I'm coming from.
Niira: Okay, then fine. But let's atleast start...
(.Tape ends abruptly.)