Mainstream, VOL LV No 12 New Delhi March 11, 2017
‘Embedded’ Journalists and Banking Scams
Sunday 12 March 2017
by Amitava R. Sinha Roy
Watchdog journalism informs the public about corruption, nepotism, cronyism and institutional chicanery. As the fourth pillar of democracy the media, along with the judiciary, executive and the legislature, fights for the public good. Tough questions and investigative reporting must be an essential element of journalistic work and a reporter must probe and question, dig deep and demand more. To avoid shallow reporting, journalists must push for more evidence and access. When it doesn’t matter for officials what’s true and what’s not, the press must stand firm on behalf of the future generations.
The Indian media’s role as the people’s conscience has taken a beating in recent times. Quality, reliability and alertness have dimi-nished. Nowhere is this more in evidence than in the coverage of the biggest scam in the country which is in the banking sector. The debate on the health of the PSU banks is an example of how many business journalists have failed to perform their duty. Happy with printing press releases, like the three monkeys of Gandhiji who can’t see, hear or speak ill of banks and their borrowers, Indian news reporting has become mostly passive inasmuch as news comes to reporters from vested interests of one sort or the other and are not spotted and dug out by reporters on their own initiative as was the case in the past. The nexus between complicit bankers, politicians, bureaucrats and businessmen (or market operators) is the reason behind the various scams. This is, in many ways, tantamount to ‘embedded journalism’.
Skeletons continue to tumble out of the cupboards at state-owned banks. The combined net loss of 20 public sector banks stood at Rs 16,272.34 crores for the fourth quarter ended March 2016 as the bad loans’ situation worsened. Punjab National Bank reported a loss of Rs 5367 crores, the largest-ever loss reported by a public sector bank (PSB). A mountain of stressed assets can’t be now wished away. While the total corporate loans of the PSBs increased from Rs 24.11 lakh crores in fiscal year 2013 to Rs 26.95 lakh crores in December 2015, the bad loans jumped from Rs 84,050 crores to Rs 2,23,613 crores. Corporate bad loans constitute 56 per cent of the total bad loans of the PSBs. In just three years, the corporate NPAs of the PSBs more than doubled as a percentage of the total corporate loans, going by the information provided by the then Minister of State for Finance, Jayant Sinha, in Parliament.
Yellow journalism and money-bags owning media companies worry people the world over. In India, the terms ‘paid media’ and ‘presstitutes’ may have come into circulation in the recent past but the rot had set in much earlier. Old-timers always spoke in hushed tones about how some of the so-called respected editors and reporters had compromised and made money under a facade of honesty.
By hook or crook, the corporate communi-cation divisions of companies and their PR firms by and large controlled what was printed or broadcast about their masters. News reports inimical to the interests of a corporate entity were usually planted by business opponents. The Nira Radia tapes removed doubts, if any, that the media had been pliable for quite some time.
Transparency in sanctioning and disbursing loans has always been missing at PSU banks. Political and bureaucratic interference, coupled with corruption, has plagued the lending process at PSU banks. NPAs have been systematically used to bail out crony capitalists using tax- payers’ money. A vigilant press would have sounded the alarm-bell when Vijay Mallya worked the system twice. PSU banks readily gave new loans to Mallya even when his airline was sinking. Mallya, who is sitting pretty in London now, owes more than Rs 7000 crores to these banks. And, by far, he is not the only one.
The journalists reported about the company getting these loans but never tried to find out whether the banks had done due diligence. While they wrote reams praising the king of good times, a little homework would have told them that Mallya was a chronic defaulter. Many borrowers like Mallya committed fraud by diverting these loans either by overinvoicing imports using a foreign subsidiary owned by the promoter or exporting to foreign shell companies and claiming they had defaulted.
All this was in the public domain and could have been sniffed out by a newshound, but journalists, addicted to handouts by PR companies, showed little inquisitiveness. The right questions weren’t asked for many a business journalist was compromised, or embedded, if you will.
Banks use many methods to hide bad loans. They resort to regulatory forbearance methods such as restructuring, 5:25 refinancing, strategic debt restructuring, selling NPAs to asset recons-truction companies. An educated and vigilant journalist can catch these by running the fine toothcomb through the balance-sheets of the PSU banks. Journalists can easily track non-financial events which act as warning-signs of a prospective defaulter. These include sudden exit of senior company executives, labour strife, market practice changes, etc. But not if he/she is in cahoots with the bankers.
After the latest round of capital infusion, the PSU banks have received Rs 92,639 crores from the government since 2009. Even today, there is little accountability when it comes to the PSU banks. Their bad loans far exceed their capital base. The common man is being taxed to fund corrupt and inefficient public sector banks. Journalists rarely question this good money being thrown after bad.
Journalists keep pushing the corporate line of the need to reduce interest rates but fail to question the honchos when the RBI Governor points out that the companies are at fault.
Big loans are written off by banks with gay abandon while the life of small borrowers is made hell. It is a matter of national shame that farmers commit suicide for loans of a few lakhs, but a Mallya rips off PSU banks of thousands of crores and shamelessly gives interviews to journalists saying he has not run away and cocks a snook at the Indian judiciary. Many journalists eagerly present his side of the story but usually gloss over his misdeeds. The All India Bank Employees Association has revealed that PSBs wrote off anything between Rs 300 crores and Rs 7000 crores in loans to 50 big corporates. The media hasn’t exposed the connivance and complicity of the bank brass. Crony capitalism is flourishing at the expense of the common man.
And now, let’s move on from macro to micro. Let me give you some examples of journalists being bought out that I observed in over three decades in the heart of great newspapers.
What can one expect from business journalists who have never visited an industrial area but their entire reportage is based on press conferences in five-star hotels? Even the questions they ask are prompted by the PR agency which is organising the event. They don‘t even bother to scan the back files of their own newspapers or Google for articles on the company before they go to the press meet.
Many a time, reports on companies have been written by PR agencies and mailed to reporters who have been known to put their name on top and submit them as exclusives! I have seen articles written by PR companies emulating the style of the reporter and news-paper they want the article to be published in. In fact, columns and edits too have been manu-factured for ‘planting’ by pliant and sold out journalists.
The Editor of a leading business daily, then headquartered in Calcutta, told his News Editor to take a reporter’s story on Page 1 because his earlier story was well written. The next morning he was perplexed to find a badly written piece on the front page. When asked, the hard-bitten News Editor stoically said, “fax”. Both stories had been faxed to the reporter by the company’s PR department. The first story had been written by the departmental boss while the second was written by a junior!
The cocktails, lunch/dinners and the gifts doled out by PR agencies and companies are of greater interest to such journalists. It hasn’t stopped at meals and baubles. Expensive gifts for every festival are the norm. This can be witnessed at the office of major newspapers and other media organisations two-three days before any big festival when carloads of gifts arrive for senior scribes. Also, 56-inch colour TV sets are routinely given to journalists on crucial beats on Diwali.
Apart from all this, holidays for senior journalists and their families are also available for ‘obliging’, that is, toeing the PR line. The other is junkets, foreign for seniors and local for juniors. All-expenses-paid foreign trips in the guise of meeting the foreign-based top brass of companies is a time-tested method of keeping journalists in good humour. And, if the shopping too is paid for, then it is a match made in heaven! A few days spent at a company’s guest house in Shimla, Nainital, Coorg or Bangalore is quite the norm for juniors and freshers in many beats.
Plots in State capitals are to be had for the asking for pliable State correspondents. Many have taken advantage of such largesse. A correspondent of a leading business daily was ‘lent’ a large sum of money by a farm MNC to buy a flat in east Delhi. More than one such transaction is talked about in journalistic circles.
A journalist in a leading business daily covering the crucial markets beat in Mumbai publicly coveted an imported motorcycle in glittering red. His craving was so public that it was no surprise that the chairman of a Sensex company had the bike delivered to the journo’s home on his birthday. It is said that after that day, gushing reports about the company appeared regularly in the reporter’s newspaper. The value of the reports to the company is difficult to estimate. And, though the journo has moved on to far more expensive modes of transport, he still lovingly expends copious amounts of spit and polish on his beloved red motorcycle.
A group of Delhi-based business journalists was taken on a junket by a leading white goods maker to the company’s headquarters in an Asian country. They were each gifted the latest model of the company’s washing machine. Customs at Delhi insisted that duty be paid on the machines. The journos baulked. The company representative paid after some delay as he wasn’t carrying enough cash and had to arrange the balance. The next day the company presented each reporter with the latest 21-inch microwave from the company’s range to make ‘amends’ for the embarrassment at the airport and to say ‘sorry’ for not having anticipated that Customs duty would have to be paid.
Journalists also help companies to gain access to Ministers, secretaries and politicians. They also provide crucial information to corporates on the thinking in Ministries and the movement of crucial files. They are better at liaison than professionals! The Santanu Saikia episode is only the tip of the iceberg.
Over the years, business journalists, honou-rable exceptions apart, have been added to the payroll of companies. The Nira Radia tapes’ scandal saw many a journalist on her payroll exposed. The Essar leak and the Augusta Westland helicopter scam have exposed the extent of the rot.
Receiving shares from the quotas of promoters is another ‘perk’ for business journalists. The widespread malpractice peaked in the Aftek Infosys case.
The extent of ‘embedded journalism’ can be gauged by the press reports about an Italian company’s bribing of senior TV and print journalists.
Jobs for relatives and cheap loans help win over journalists. PSUs are known to hire the wives and sons/daughters of senior scribes as consultants. Obviously, then they can’t be expected to do investigative reports.
Wealth, women and wine continue to be the bane of journalism. And hence, having the will or desire to understand the complexities and nuances of banking is expecting too much from such journalists.
The author is a journalist who has spent 36 years working in newspapers in Delhi.