TV rights & wrongs — CBI probe may force DD to break silence

ASG Kirit N Raval — who was asked study the agreement by the new CEO of Prasar Bharti O P Kejriwal — gave his opinion on April 15, 1999, and eleven days later, Justice B N Srikrishna of the Bombay High Court gave his ruling in a case where Nimbus went to court after being cut out of the World Cup 1999 deal even though it was part of the Consortium.

While Raval unambiguously said that the original agreement setting up the Consortium (signed on March 24, 1998) was detrimental to DD’s interest and should be at least be suspended, if not terminated, Justice Srikrishna had said of a subsequent agreement: “A reading of the affidavit raises serious doubts about the manner in which the said agreement of Sept 21, 1998, came to be entered into. Post facto, after I noticed what transpired in court, the suspicion has been confirmed.”

Raval said the agreement was per se flawed because DD was obliged to — but did not — call open bids or some other form of ensuring fair competition before employing the Consortium to bid for television rights of premier sports events on its behalf.

“I was informed that the normal policy of the querist (PB) is to invite public offers from potential participants and there is no justification for the departure from the practice. I am informed that negotiations were held with six parties, including the four who form the consortium and ultimately the agreement was entered into with only four parties without any reason being specified in the file, ” the ASG had observed.

His observations about the agreement for Financial Participation and Marketing — FP & M — (which governed the World Cup deal of 1999): “More shocking to me, however, is the agreement for FP and M, which is stated to have been entered into on 21.9.98. That agreement mentions in clause (H), an order of learned arbitrator Dr A M Singhvi, when the first interim order of the arbitrator was passed in October 1998, ie, after the alleged date of agreement dated 21.9.98.

“Further, I have been given three xerox copies of the agreement. One copy shows that it has been signed by Stracon on 3.11.98. Another shows that this date is altered to 3.12.98 without the signature of UTV. A third copy shows the signature of all the three persons with different dates of 3rd December, 5th December and 8th December. What is the exact date of the signature of this document and in what circumstances did clause (H) find place in the document are circumstances which create grave doubt about the whole arrangement.

“I have also been shown an earlier draft of this agreement which provided that the surplus has to be shared in the ratio of 70% for the querist (DD) and 30 % for the consortium. However, in the agreement, it has been changed to 50:50.

“`Clause 7 of the agreement dated 24.3.1998 provided that the marketing arrangements will be worked out on a case-to-case basis, whereas the agreement dated 21.9.98 provided for covering both, the Sharjah Cup as also the World Cup. In other words, the arrangements seem to have been dovetailed to suit the interest of the Alliance in spite of the occurrence of various breaches committed by the Alliance…”

In fact, as events turned out, it was Nimbus’ umbrage at being cut out of the World Cup 99 deal that took the rights’ matter to court, where ultimately, the rights were rebid for in the court of Justice B N Srikrishna and DD got a better deal. Stracon then raised its bid by assuring DD a total revenue of Rs 58.56 cr (including a minimum guaranteed profit of Rs 14.50 cr), more than double the Rs 26 committed earlier. It was, however, unable to deposit the bank guarantee within time, and Nimbus made it to the finishing line.

Luckily, by this time, Prasar Bharti seems to have become wise to the ways of Stracon. So, in another proceeding, in the Delhi High Court, DD itself filed an affidavit criticising the marketing agreement of September as it suspected there was “more to it than meets the eye.”

Justice Srikrishna had also said so in his order dated April 26, 1999: “If the authorities who take a policy decision and execute contracts in DD/PB of India, had made the offer to all the four parties forming part of the consortium under the mother agreement dated 24th March 1998, this situation would not have come about. It appears that there was and there is good reason for suspecting the bonafides of the agreement dated 21 Sept 1998. Mere comparison of the terms therein with the terms that the first respondent (Stracon) has offered today before me would drive home the point.”

But despite such a clear indictment from the court on the September agreement and the additional solicitor general’s unambiguous opinion that the original agreement of March 1998 was per se flawed, all Prasar Bharti did was to sit on them. Worse, when Arun Agarwal submitted his report on April 23, 1999, suggesting a CBI probe, it sat on it some more. Till, one year later, Agarwal (a petitioner in the Supreme Court against the Cogentrix project in Karnataka) himself made parts of his findings public after Cronjegate.

Now that the CBI is looking into it, DD might finally be forced to break its silence.