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| PR No.200/2010 |
Mandatory disclosures
by the media of its stake in corporate sector
SEBI had taken up with Press Council of India its
concerns on practice of many media groups entering into agreements, such as
‘Private Treaties’, with companies. Typically, such arrangements are with
companies which are listed or which proposes to come out with public
offerings. These, in general, entail a
company giving stake in it (shares, warrants, bonds etc.) in return for media
coverage through advertisements, news reports, advertorials etc. in the print
or electronic media.
It was felt that such agreements may
give rise to conflict of interest and may, therefore, result in dilution of the
independence of press. This may consequently compromise the nature, quality and
content of the news/editorials relating to such companies. Needless to say,
biased and motivated dissemination of information, guided by commercial
considerations can potentially mislead investors in the securities market. Such
journalism would not be in the interest of securities market.
SEBI, given its legal mandate to
protect the interest of investors felt that such brand building strategies of
media groups, without appropriate and adequate disclosures may not be in the
interest of investors and financial markets. There are prescribed norms of
Journalistic Conduct that require journalists to disclose any interest that
they may have in the company about which they are reporting. However, there are
no equivalent requirements in the case of media companies holding a stake in
the company which is being reported / covered.
Press Council of India has informed
SEBI that in its meeting held on 22.02.2010 at
1)
Disclosures
regarding stake held by the media company should be made in the news report/
article/ editorial in newspapers/television relating to the company in which
the media group holds such stake.
2)
Disclosure on
percentage of stake held by media groups in various companies under such
'Private Treaties' on the website of media groups should be made.
3)
Any other
disclosures relating to such agreements such as any nominee of the media group
on the Board of Directors of the company, any management control or other
details which may be required to be disclosed and which may be a potential
conflict of interest for media group, should also be mandatorily
disclosed.
The copy of the Press Release
sent to SEBI by Press Council of India in the matter, is enclosed.
The above is for information and
necessary compliance by all concerned.
Mumbai