Founded in 1959, UNI has been running on losses for many years, defaulting on payments to employees from 2017.
Efforts to revive the United News of India (UNI), a 60-year-old news agency, has hit a serious roadblock. At one time, veterans such as Kuldip Nayar were at the helm of the agency.
Even a month ago, there were some genuine hopes for the survival of the debt-ridden news agency, which has salaries pending for over five years and over 350 people. There are nearly a hundred journalists on its roll.
Media experts say the number of journalists is not enough to service India’s top clientele, especially the big newspapers and top-rung television channels. Specialised services like sports, economy, features, overseas, Bollywood and commodities, once the hallmark of UNI, are no longer there. The Delhi office lacks reporters and the copy desk is very depleted. Such shortfalls are a consequence of financial woes.
The UNI head office in the heart of Lutyens Delhi, has some value, the news agency and its news feeds do not any more matter the way they once did to India’s top news outlets.
And then, the land does not belong to UNI alone. The government, through a notification, has said the Ministry of Urban Development has allotted land out of UNI’s Delhi office to as many as five institutions, namely, Press Council of India, Press Club of India, Directorate General of Foreign Trade, Press Association and UNI. The entire plot of 1.841 acres is at 9, Rafi Marg.
Things could have been different if UNI had struck a deal to develop the land on its own. Some offers were made by outsiders, but the news agency could not formalise the deals because of opposition from some members of the board, and also a disapproving trade union.
Now, there are bigger troubles bothering the news agency. The first resolution process has fallen flat. And now, the State Bank of India (SBI), the country’s top bank, has thrown a spanner in the news agency’s auction process, demanding a small sum of Rs 2.5 crores that UNI had borrowed from the bank long ago. The bank, so far as the records go, had given cash after UNI mortgaged a building in Mumbai’s Cuffe Parade. The building was eventually sold by the bank to recover the cash. UNI officials, surprisingly, do not know how much the bank recovered by selling the building, and why the bank is again seeking cash from UNI.
That is an issue, resolution officials say, UNI needs to clear with SBI before the second round of the bidding process starts. Surprising is the fact that SBI had till recently not even acknowledged several reminders from NCLT about its dues. Now the bank has suddenly pushed its demand.
It is not that the UNI management did not try to raise cash. A huge building in a posh neighbourhood of Hyderabad owned by UNI almost went under the hammer, but the sale got stuck. UNI demanded Rs 200 crores and the bidders said they will only offer Rs 50 crores, aware of the distress the agency was under.
But the sale of UNI must happen for it to survive, as the news agency has little cash to run its operations. The agency was hoping to resolve its financial crisis through a bidding process initiated by the National Company Law Tribunal (NCLT). But the new demand from SBI has interrupted the process.
“We are now waiting for the second round of bidding which will happen when the committee of creditors (CoC) will evaluate the new sets of bids placed before the resolution professional,” Rajesh Puri, head of UNI employees’ union, said in a brief interview.
This is one side of the crisis, the other side is the meagre amount of cash pledged by one of the bidders for UNI. There were five of them. Some showed great interest and asked the UNI management to delay the bidding process by a month and half. But eventually one turned up with a proposal that shocked the resolution professional and the UNI management.
On the table was an offer of just Rs 1 crore for taking control of a news agency that works out of a prime location in Delhi and was once valued by its management for Rs 1,300 crore. The person who offered the Rs 1 crore bid was Rakesh Ramanlal Shah, a realtor from Gujarat. He was the only bidder who came forward, the rest did not even show any interest.
But Shah said he would pledge only Rs 1 crore and then take charge of UNI to make more investments. The UNI management was flummoxed.
Other bidders were former Minister of State and former BJP MP, M.J. Akbar, who had participated as a representative of the Brain Trust of India, founded by Zee super boss Subhas Goyal. Other bidders were the financially-strapped Statesman newspaper, a relatively unknown Kolkata-based realtor, Square Four Infrastructure, and former editor of Chauthi Duniya, Santosh Bhartia.
Shah, who won the bid, eventually backed out after it became clear that the UNI real estate, located on prime land in the heart of Lutyens Delhi, is not freehold land but leased to the government. This, in short means, those seeking control of UNI, will not be able to dispose of the 2-acre real estate, as the process will have to go through rigorous government controls.
Once the first round of bidding went into a limbo, representatives of the Hindustan Times and the Times of India showed interest in taking control of the venerable 60-year-old news agency. Officials of these two dailies, claim those in the know, are in touch with Pooja Bahri, the young resolution professional overseeing the entire process of UNI’s outright sale. It remains to be seen if these two newspapers stay on the table when the second round of bidding process starts.
The NCLT will restart the auction process soon. This time the bid will be different. Those keen to acquire UNI must clear the dues of SBI and then pledge cash to acquire UNI.
But the big question that hangs like the proverbial sword of Damocles on the UNI management is how much cash will be put on the table. The present UNI management wants the bidders to clear the dues. Crucial is the clearing of the backlog of salaries for five years, provident fund dues and some other dues. Apart from that, some cash needs to be on the table for the news agency to continue to function and recover some of the ground lost during the past years.
That, the bidders, are reluctant to pay. They just want control of the agency, and some say the intention is to demolish the existing structure and create a five-storey building, thereby monetising their business. But that cannot happen, because the government has already allocated land to a number of parties along with UNI. Any such pledge has to be honoured.
Everything is on paper for nearly two decades and the records show that things could have worked for UNI. It was in 2006 that UNI got an offer that some in its top tier thought could have bailed it out of a financial mess. Essel group chief Subhash Chandra, via his investment vehicle Mediavest, bought a 51% stake in UNI for Rs 32 crore by securing the highest bid. Fearing that Chandra would take full control of UNI or use it to the advantage of his Zee media empire, some of the shareholders, including ABP and the Hindu, filed a case with the Company Law Board. Chandra lost the case and walked away with his cash.
Then, one of India’s top industrialists wanted to strike a deal with UNI and take charge of the land to build their corporate office in the national capital. The corporate entity was ready to offer a decent amount to the news agency but the trade union of the UNI employees reportedly scuttled the move. Another Gurgaon-based IT company offered a solution to turn around the cash-strapped agency in five years and put some Rs 50 crores on the table upfront. That offer also fell by the wayside because the management did not agree to the terms offered by the IT company.
Efforts were made to take UNI to the Jio platform but that also did not work. Some senior journalists tried to get subscriptions from various ministries, but they also did not have much success.
Then came Baba Ramdev and his associates to take charge with some ambitious plans, but it also did not work for UNI.
Founded in 1959, UNI has been running on losses for many years, defaulting on payments to employees from 2017. Four years ago, in October 2020, Prasar Bharati, the state broadcaster, unsubscribed the UNI service. This caused a serious dent in the agency’s revenues. Prasar Bharati had paid around Rs 6 crore per annum as subscription fees to UNI. Along with Prasar Bharati, the agency also lost the monthly subsidy of Rs 17 lakh from the National Council for Promotion of Urdu Language, an autonomous body under the union education ministry that acts as the principal monitoring authority for promotion of the Urdu language. The cancellation of the subsidy resulted in several Urdu newspapers pulling their subscriptions from UNI, the first and only news agency providing Urdu news in 1992.
Last year, the NCLT noted that the agency had defaulted on payments worth Rs 103 crore. The NCLT had passed an order in favour of the UNI Employees Union which had alleged financial discrepancies in the agency. Pooja Bahri, appointed by the NCLT as the insolvency resolution professional, says she is still optimistic that UNI will revive.
UNI was started in 1959 after eight of India’s biggest newspapers joined hands to counter the monopoly of the Press Trust of India. But things have gone terribly wrong for the agency, for its properties lie seized while staff remain unpaid for over five years. Only partial payment has been made by the management, and court cases have piled up. Shareholders started unsubscribing, one by one, in 2006.
What is important is that unlike PTI, UNI didn’t make it compulsory for its shareholders to be subscribers, a decision that did not help.
The largest shareholder is the ABP group, which owns 19%. Aveek Sarkar, vice-president of the group (and present chairman of PTI) owns 11% in his personal capacity. The Statesman has 12%, the New Indian Express 8%, Hindustan Media 7.2%, Manipal Group 6%, Deccan Herald 6%, Bennett Coleman 5.3%, the Hindu 3.4%, and the Indian Express 1.25%.
UNI currently has some 340 employees, out of which a hundred are on fixed contracts. There are serious issues facing the management regarding salary disbursement. Those who are permanent staff allege that new contract workers are paid on time while the salaries of the permanent staff are either not paid on time, or paid in full. They allege that the permanent staff get a meagre Rs 15,000 every month, and that this has been happening for more than five years. Such allegations remain unverified, although it is clear that several employees are facing hardship.
UNI has top subscribers like Hindustan, Dainik Bhaskar and Dainik Jagran. Over a hundred cases against UNI over non-payment of dues have been filed, further dampening interest in acquisition.
The road to the revival of UNI, a news agency that once produced a boxful of top editors across India and abroad, appears very tough.