A boardroom battle has again erupted among family members of Kasturi & Sons, which owns and operates The Hindu group of publications. It came with a decision on Monday to appoint Siddharth Varadarajan as editor of the flagship daily and to relieve five family members on the board of all editorial reponsibilities. The new editor is a professional employee, not related to the family.
In the Monday board meeting, N Ram, editor-in-chief and publisher, with six other directors in the 12-member board, voted to appoint Varadarajan in place of N Ravi. It was also decided, in accordance with changed succession norms, that Ram would step down from his responsibilities, along with four others on the board. The decision will require approval at an Extraordinary General Meeting (EGM) of all shareholders — there are just under 50, all part of the same family — convened on May 20.
The board decision has been challenged by Ram’s brother, N Ravi, editor of The Hindu and three other board members. Ravi says under the original succession plan, he was to take over the reins from Ram. He indicated an exploration of legal options to challenge the board resolution. Ram did not respond to an email sent by Business Standard.
Ravi said K Balaji (his cousin), appointed managing director in March last year, had proposed in the meeting on Monday that all family shareholders step away from the operational side and leave the professional team to run the paper. The measure meant the removal of N Ravi, Nirmala Lakshman, K Venugopal and Malini Parthasarathy, all cousins, from their editorial roles.
“The entire process involves major structural change and article change. We have said a family business consultant should be appointed before the rule is imposed. But they have imposed it and the appointment of Siddharth Varadarajan will be taken up in the EGM on May 20,” said Ravi to Business Standard.
He said Ram and his supporters were trying to impose a plan of editorial succession that was totally at variance with the long tradition and practice in the institution and also contrary to the directions of the Company Law Board (CLB, given last December). Under which, Ravi was originally set to take over as editor-in-chief after Ram’s retirement.
RAVI & RAM LETTERS
Ravi put down his views in a letter to all employees yesterday. In answer to which, Ram hit back today. He said the CLB had declined to interfere in the matter of editorial succession but had asked the directors and the shareholders of the company to consider the issue without much delay. He said the board decided to adopt the principle of separating ownership and management not only on the editorial side but also on the business side, where the appropriate changes are expected to be made in the next few months.
“Separation of ownership and management is a principle many successful organizations maintain, and when it comes to newspaper organizations, eight of the top 10 English newspapers in the country have a non-family professional as Editor,” Ram stated in his letter
Went Ravi’s letter yesterday: “Ram seems bent on taking all the editorial directors — most are in their 50s — into retirement with him, with a scorched earth policy to ensure that no one in the family succeeds him…In a sudden change of rules and under the specious plea of separating ownership from management, along with my removal as editor, Nirmala Lakshman is to be forced to “step down” as joint editor and Malini Parthasarathy as executive editor.”
Ravi’s letter also alleged there have been distortions creeping into the “editorial framework” of the paper. “Among the issues that I have raised with the other directors during the discussions in the Board and outside are: the unmerited coverage of certain political favourites on specific directions; excessive coverage of the activities of the Left and some of its leaders; for reasons that are bound to emerge sooner rather than later, turning the newspaper into an apologist for A Raja (former Union telecom minister, now in jail) through the 2G scam coverage, remaining deafeningly silent on his resignation in the face of mounting evidence even when demanding the resignation of Suresh Kalmadi, Ashok Chavan and Yeddyurappa in similar circumstances; pronounced pro-China tilt, blacking out or downplaying any news that is less than complimentary to the Chinese Communist regime,” wrote Ravi.
He further said the editorial integrity of the paper has been compromised under Ram and “news coverage linked directly to advertising in a way that is little different from paid news”. He cited the instance of an interview of A Raja published in The Hindu in defense of the telecom licensing policy. “Very recently, those of us who were not privy to the deal-making learnt to our shock that a major interview with A Raja in defense of the telecom licensing policy published on May 22, 2010 — that was referred to by the Prime Minister in his press conference — involved a direct quid pro quo in the form of a full page, colour advertisement from the telecom ministry that was specially and hurriedly cleared by the minister personally for publication on the same day in The Hindu,” he said.
BACKGROUND
In March last year, a dispute had surfaced amongst the Kasturi Ranga Iyengar family which controls the group around the appointment of K Balaji as managing director of Kasturi & Sons. Some of the family had at the time opposed the re-designation of N Murali as senior managing director. Though assigned an apparently higher position, he had been asked to limit his responsibilities to circulation and work on accounts and industrial relations with Balaji. In his earlier position, Murali had wide-ranging supervisory powers, cutting across departments.The decision was later reversed by the CLB judgement mentioned earlier, in December 2010.
Kasturi & Sons has 12 board members. Each of the four cousins, who together control the entire equity, has three members on the board. There are just under 50 shareholders, all members of the Kasturi Ranga Iyengar family. The cousins are G Narasimhan (father of N Ram, N Ravi and N Murali), S Parthasarathy (father of Malini Parthasarathy, Nirmala Lakshman and Nalini Krishnan), S Rangarajan (father of Ramesh Rangarajan, Vijaya Arun and Akila Iyengar), and G Kasturi (father of K Balaji, K Venugopal and Lakshmi Srinath). Members of the families of the four cousins — sons of Kasturi Srinivasan and Kasturi Gopalan (the second-generation owners) — own 25 per cent equity each.
