A clarification appeared on page 1 of Economic Times on the morning of September 15, strangely the anniversary of the Lehman Brothers blowout. I would like to reproduce the clarification because it has great import and in many ways typifies the malaise in Indian journalism. The ET clarification read – ICICI Bank has clarified that the aggregate net non-performing home loans sold by it to asset reconstruction company ARCIL since its inception is less than Rs 1,500 crore, instead of the Rs 10,000 crore mentioned in an ET article published on September 13. The bank has also pointed out that fraud was detected only in the case of five loan accounts, which together came to less than Rs 1 crore, a tiny percentage of the total. Separately, the Secretary of the Institute of Chartered Accountants of India (ICAI) has clarified that the President of his organisation has not asked the Central bank to audit assets sold to ARCIL.
Interesting clarification boxed on Page 1 of ET. Curious that it puts the onus of the clarification on ICICI and ICAI. Yes, the story appeared in ET, but there is no remorse, not so much as a by your leave about ET’s own culpability in what appears to be a monumental judgmental error. Nowhere does it say that ET apologises for carrying the said story, which obviously worked to Brand ICICI’s detriment. Bah, it did seem a bit odd. First, the misdemeanour and then not even a sorry. Even last year, in the immediate aftermath of the Lehman, Fannie Mae, Freddie Mac fiascos, speculation was rife in Mumbai’s financial markets that ICICI was in trouble. Murmurs persisted and ICICI’s stock price took a massive hit. The management came on various television channels to tell the world at large that all was well. But suspicions lingered. After all, ICICI Bank is India’s largest and most aggressive private sector bank. It could not be allowed to fail. Over time, one realised that the bank was in the pink of heath and it was business as usual thereafter.
Fade to black.
Now, I take you to ICICI’s page 1 advertisement in the same ET and ToI on the morning of September 14. It was an unprecedented step, putting out a quarter page ad on page 1 of ET and ToI. Although, I must add that these days clarifactory adverts from corporates are the flavour of the season, given that ADAG ran a series of them nailing the Petroleum Ministry’s lies. Now, I would like to reproduce parts of the advertisement – A newspaper carried a baseless article on September 13, 2009, suggesting that the ICAI has asked the RBI to re-audit sale of loans by ICICI Bank to ARCIL. What is perhaps most pertinent and damaging is the last line in bold which says – The news item appears to be a deliberate and malicious plant aimed at damaging the Bank’s reputation. The Bank is taking up this matter with regulatory and law enforcement authorities. These are strong words. It is believed that ICICI thinks that these sabotage attempts are being made by corporate rivals. In this hotstepping information age, any such story or rumour can act as a catalyst for a coordinated market operation, where operators sense the possibility of making some quick bucks. Last year, ICICI Bank had approached RBI and SEBI for a probe into the brutal hammering down of its share price by what it called a ‘vested interest’. We still don’t know who the culprit was, but can hazard an educated guess. Nothing more. This time the story appeared on a Sunday, when the stock markets are shut, so blood-letting on the counter was avoided.
During the crisis in Singur, Ratan Tata had made similar allegations against a corporate rival stoking fires or fishing in troubled waters. However, it wasn’t clear as to who was behind the move or instigation. Of course, one had hazarded an educated guess then as well, which brings me to the regulator, what is it doing?
Corporate rivalry is nothing new in India. The ongoing gas opera between the Ambani brothers is a case in point. The way NTPC, which was lying somnolent for most part, has suddenly moved into the scrap is most interesting as it tries to protect its rights and interests in the matter. But this has only happened after ADAG, owned by Anil Ambani, ran a series of controversial ads in 33 national and regional dailies, highlighting how Reliance Industries and the Petroleum Ministry was trying to short change the public sector power utility.
But back to ICICI’s alleged dud loans, which ET wanted to throw into stark relief. Every banking and financial institution runs on trust. When there is a trust deficit between the institution and the customer, that’s when problems begin. Overwhelming greed, nay avarice, in corporate America was partly responsible for the collapse of the five iconic investment banks and other institutions, triggering a global meltdown hitherto not seen in modern times. The other more important part was a trust deficit. When customers start thinking negatively about their bank or any other financial institution that they have dealings with – insurance company, brokerage, depository, et al – that is the beginning of the end. This is also when runs take place on banks.
Similarly media, too, runs on trust. The reader or viewer believes what he sees or reads and treats it like gospel. Media has to be responsible at all times in what it puts out. The increasing clutter in media and its resultant competitive edge is proving a damper, for it means that people take short cuts or are malleable and ductile to accept ‘plants’. I hope only plants are accepted and nothing else in lieu of it. These plants, as ICICI has stated in its advert, are aimed at eroding and maligning reputations and could have long term ramifications for the people or entities involved. I am amazed that while ET did put out a clarification a day after the ICICI advert, it never bothered to accept or fix responsibility. It chose to word its clarification in such a manner as if ICICI has clarified and not ET. Not even an admission of guilt, not even a ‘the error is regretted’. Did it mean that they were standing by their story and were only willing to carry ICICI Bank’s clarification under extreme duress? Was there more to it then? People have speculated long and hard about ICICI’s loan portfolio. But nothing concrete has ever come out of it. So, in totality, it was a truly shameful show of not accepting wrong and portraying a wrong as right. In ET’s specific case, it cannot be that two or more wrongs make a right. I cannot believe for a moment that it was a systemic failure this time.
What were the gatekeepers doing even as the reporter was filing the malafide story? What was the desk or the editor doing? Did they take a call on the story in this sorry episode? I tried to access the story by ET Bureau writer Anand Rawni, but found that the story had been pulled out. The legend that greeted me was – ‘Page not found’.
Lost in translation, but only after the damage was done. Nobody remembers the clarification, people only remember the story. Therein lies the rub.
(Sandeep Bamzai is a well-known journalist, who started his career as a stringer with The Statesman in Kolkata in 1984. He has held senior editorial positions in some of the biggest media houses in three different cities - Kolkata, Mumbai and New Delhi. In late 2008, he joined three old friends to launch a start-up – Sportzpower Network – which combines his two passions of business and sport. Familiar with all four media – print, television, Internet and radio, Bamzai is the author of three different books on cricket and Kashmir.
The views expressed here are of the writer’s and not those of the editors and publisher of exchange4media.com.)