Media conflict of interest

There is some interesting play between SEBI and the Press Council of India with respect to disclosure of equity interest of media houses in companies where there is exchange of advertisement for a share in the equity of a small to mid-size company. SEBI came out with a press release last week which states:

"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."

and then states that "Press Council of India has informed SEBI that in its meeting held on 22.02.2010 at New Delhi, it has accepted the following suggestions of SEBI and has mandated the following" and gives a list of three sets of disclosures which must be made by media. However, the Press Council website does not even carry the press release. The press release of the PCI is available only on the SEBI webite and sings a different tune. Not only has the Press Council not 'mandated' anything of the sort, it has not even suggested such disclosures. What it actually says on SEBI's website by way of a press release is: "The above suggestions may be kept in mind by the media."

Given that SEBI has no power over either the media or unlisted companies and the rather feeble attempt of the Press Council, this attempt isn't going anywhere in the near future.