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IFJ hails exchange board's decision

The International Federation of Journalists (IFJ) welcomes new disclosure norms introduced by the Securities and Exchange Board of India (SEBI), requiring that the country's media companies reveal any shareholdings held in companies they report on.  

These norms evolved in consultation with the Press Council of India (PCI) in response to growing public concern over the prevalence of news content that was paid for by corporate and political entities.  

"The IFJ believes that disclosure norms are mandatory for individual journalists under codes of practice enforced by all media houses," IFJ Asia-Pacific Director Jacqueline Park said.  

"However, it seems that the media houses themselves have failed to meet the standards of transparency and public probity that they expect from their journalists."  

The practice of "private treaties" between media houses and corporate entities, which involved an exchange of shares for free advertising space and time, has been the focus of considerable public anxiety. Invariably these "private treaties" involved corporate entities that had imminent plans of public share offers. Media houses that acquired shares in these companies stood to make windfall gains when the shares were listed on the stock markets. SEBI has drawn attention to the potential for serious conflict of interest in this practice.  

On request from SEBI, the PCI tendered advice on August 2 that the following disclosures be made mandatory for media houses: (i) their share holdings in companies that were being reported on; (ii) the quantum and value of their stakes in companies they had concluded "private treaties" with; and (iii) any nominees they have on the boards of the companies they report on.  

Concerns about news coverage that was paid for came into sharp focus after India's general elections in 2009, when several newspapers were found to have opened bargain counters for candidates to bid for space and favourable coverage.  

This range of media malpractices was the subject of an inquiry by a specially constituted two-member committee of the PCI, which submitted a comprehensive report for the consideration of the full membership of the council in April. As the IFJ noted earlier in August, several of the key findings and recommendations of the two-member committee were omitted when the PCI issued its final report in late July.  

"The SEBI requirements for mandatory disclosure by media companies in situations involving a potential conflict of interest are welcome in this context. Though we understand that SEBI, unlike the PCI, has powers of statutory enforcement, we would expect India's media industry to voluntarily put in place the proposed disclosure norms which are essential to ensuring free media practices in a democratic society," Park said.  September 7, 2010