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Nehru’s brainchild: On the verge of bankruptcy”They are cremating Pandit Jawaharlal Nehru for the second time (at National Herald)”. Thus wrote septuagenarian M.C. Chalapati Rau, doyen of the ‘nationalist press’ and editor of the Herald for nearly four decades, in a letter addressed to Mrs Gandhi back in 1978.Four years,Nehru’s brainchild: On the verge of bankruptcy”They are cremating Pandit Jawaharlal Nehru for the second time (at National Herald)”. Thus wrote septuagenarian M.C. Chalapati Rau, doyen of the ‘nationalist press’ and editor of the Herald for nearly four decades, in a letter addressed to Mrs Gandhi back in 1978.Four years after Rau left that huffy note and resigned, the cremation seemed to be still smouldering. Tottering on the verge of bankruptcy and unable to stem the tide of mismanagement and executive corruption, the Congress(I) high command – which holds controlling shares through a trust – was toying with two alternatives last fortnight: to close down most of its publications, or to sack the present board of directors of the company that publishes the Herald chain, Associated Journals Limited (turnover in 1980-81: Rs 2.5 crore).The Chairman and Managing Director of Associated Journals, Yashpal Kapoor, Mrs Gandhi’s potbellied Man Friday, recently got a reprieve when the skeletal three-man directors’ board survived an annual general meeting with most shareholders submissively sending their proxy to Kapoor.Kapoor: Competing for top billingBut the company’s balance sheet, which was surprisingly not circulated at the seemingly well-rehearsed annual general meeting, shows a whopping accumulated loss of Rs 70 lakh against an issued capital base of just Rs 56 lakh. The paper has started skipping editions because newsprint cannot be paid for; payment of wages has become irregular; the journalists, with fingers crossed, are waiting to jump out.To cap it all, the charmed circle around Rajiv Gandhi has begun a discreet enquiry into the affairs of Associated Journals. Unconfirmed reports hint at Kapoor’s eventual succession by Arun Nehru, the MP from Uttar Pradesh.advertisementLiquidity: Talking to India Today, Nehru side-stepped the issue of his possible charge by describing it as “pre mature”. But he admitted having discussed the “sickness’ of National Herald and its sister publications with his friend, Rajiv. Many Herald insiders would welcome Nehru for his “high connection” and the board-room experience he earned as managing director of a multinational paints company.’The National Herald’s only editorial policy is sing bhajans to Indira Gandhi and Yashpal Kapoor; its only business policy is to plunder resources and secure ads by blackmail.’Chalapati Rau, former editorHowever, a mere change of guard may not pull the company back from the financial precipice where it has landed itself. In a bid to expand senselessly and far beyond its means, the company has run into what Kapoor himself recognises as the “gravest liquidity problem” in its 44-year history. Samples:The 496 employees at the New Delhi office were paid their salary for December two weeks after the due date. The chief editor, Hari Jaisingh, got his cheque on January 13.The nearly 400 employees at the Lucknow office got their salary for October, and that too in instalments, in December.The Press Trust of India withdrew its tickers from the Herald offices last fortnight after arrears crossed Rs 3 lakh.The Municipal Corporation of Delhi served final notice on the company last fortnight that the water connection at its offices would be cut because of non-payment of Rs 80,000 of arrear bills.The Lucknow edition dropped a day’s issue in December because it had no cash to buy newsprint. It also can’t make blocks because the management says it is unable to buy an AC/DC converter worth Rs 3,000.A former employee, sacked six years ago, recently got a High Court decree issued against the company for payment of Rs 17,800 to him as compensation. Since the company said its coffers were empty even office equipment –  such as cvclostyling machines – had to be seized and sold last fortnight to pay the ex-employee.A cheque for Rs 50, given to a contributor, bounced recently.’We’ve been objective in our reporting and fair in our editorial views, within certain parameters, of course.’Jai Singh, editorThe Herald’s saga of hard luck does not end here. In 1976, its banker, Punjab National Bank, was compelled by the Emergency regime to sanction a fat loan to the company for the purchase of a Soviet-made rotary machine.The loan was never paid back, and the bank went to court to obtain a decree of Rs 12 lakh against the company. It was a tricky situation for the guarantor, Vijaya Bank, which paid the money to Punjab National Bank but has little hope of getting back the instalments and interest. Another litigation is inevitable.Notorious Reputation: The company is notoriously cynical about borrowing and not paying back. A loan of Rs 30 lakh raised by it in 1975-76 for construction of a new building in Lucknow has now become Rs 80 lakh with interest. “We haven’t been able to pay back a copper of that,” said Kapoor with what looked like an oddly satisfied smile.advertisementBehind this shoddy financial profile of the company, and the apparent ineptitude of its managers, lurks a systematic plan to keep it perpetually under the thumb of Mrs Gandhi and her chosen people. The key to it is held by Jan Hit Nidhi Trust, formed by Jawaharlal Nehru’s associates – P.N. Sapru, Umashankar Dixit and Padmaja Naidu – in the late ’50s, which holds Rs 40 lakh of the Associated Journals’ Rs 56 lakh of issued capital.Its three present trustees are: P.A. Narielwala, former Tata employee, Congressman, and secretary to the Jawaharlal Nehru Memorial Fund; Umashankar Dixit, a former Union home minister and Congress(I) veteran; and, Bishambhar Nath Pandey, president of the Uttar Pradesh Congress(I) Committee. Apparently, all three of them repose their trust firmly in Mrs Gandhi.In 1978, when Mrs Gandhi broke away to form her own party, the trustees took shelter behind a clause in the company’s 1938 article of association which said “the policies of the newspapers published by the company will be to support and propagate the policies of the Indian National Congress”. The trustees – predictably – resolved that Mrs Gandhi’s party alone was the true Congress.Individual Shareholders: Besides the Trust, the company’s shares are held by about 300 individuals, only five of whom own shares worth more than Rs 1 lakh. Mrs Gandhi herself owns just Rs 1,000-worth of shares, for which she sent her proxy to Kapoor at the last annual general meeting.The paper, which had a glorious record during the freedom movement, came up in the wake of the first popular ministry in Uttar Pradesh in 1937. Nehru and Rafi Ahmed Kidwai took the initiative, and funds poured in from all corners of the country. But subsequent leaders of the Herald deftly kept the original donors out of the picture.The Tatas, for example, donated a sum of Rs 3 lakh which was in preference shares and was never converted into equities, thus denying the family reputed for its professional ability any say at the shareholders’ meetings.Kapoor was chosen by Mrs Gandhi in 1978 when the previous managing director, Mohammed Yunus, resigned after submitting a strongly-worded report favouring closure of the Delhi edition of the paper. Yunus’ decision was born out of pragmatism: the Delhi edition sold just about 1,000 copies at that time campared with 5,000 for the Lucknow edition.But Mrs Gandhi, pitted against generally hostile media, needed the Herald to continue in the capital, and Kapoor obliged her by continuing to roll out the Delhi edition, throwing overboard all financial considerations.Untraceable Accounts: During the Emergency the company raked in enormous funds through questionable advertisement collections and doubtful and often unaccounted donations. An enquiry by the Company Law Board, the report of which was hushed up soon after the Congress(I)’s return to power, established that sources of an amount of Rs 4.87 crore, shown in the book of accounts, were “untraceable”.advertisementHowever, after Mrs Gandhi’s defeat in 1977, sources of finance ran dry. Kapoor had to fall back on the age-old escape route from financial distress: robbing employees.His management stopped transmitting employees’ insurance premiums; provident fund and health insurance dues were deducted from employees’ salary but not paid to the relevant departments; income tax deducted at source was not deposited; auditors checking the company’s balance sheets were aghast to find that there was no system of internal auditing.This was topped with a paralysing lock-out in all offices of the Herald from March 1979 till the next year. The paper limped back to normalcy only after Mrs Gandhi came back to power in 1980.Meanwhile, journalists and other staff left the paper in droves, some in disgust, others out of sheer necessity. Even Khushwant Singh, who had a brief stint as the chief editor, faltered in his determination to improve Mrs Gandhi’s image when he was unable to make the management pay the staff their salary every month.Promises: Kapoor brought in Hari Jaisingh, a nondescript resident editor of the Ahmedabad edition of Indian Express, as the chief editor. With the happy tiding of 1980 came promises of more donations, more advertisements, more forced sales.Kapoor reconstituted the board of directors, its two other members being Vimal Malhotra, a small-time industrialist who, as a trade union leader, had once headed the National Herald employees’ union, and Mallikarjun, deputy minister for Railways, who held the post in total violation of the convention that no minister should hold a director’s office.In the name of expansion, the board opened up a chapter of unprecedented squandermania. Three editions of the Herald’s sister Urdu publication, Quaumi Awaz, were started from Delhi, Bombay and Patna, apart from its usual Lucknow edition.A parallel unit was begun from New Delhi’s Indian and Eastern Newspapers Society (IENS) building to bring out English and Hindi editions of a little-known publication called Indian Farmers’ Journal. The other plans on the card include three new editions of Herald, and its Hindi co-publication, Navjivan (now brought out from Lucknow alone), from Bombay, Hyderabad and Bhopal.In the process, however, the company’s real interest was diverted from newspapering to construction. Next to its present office at Kaiserbagh on the banks of the Gomti in Lucknow, it began a 12-storeyed building for Rs 4 crore; at Bhopal, it concluded a controversial land deal with the Bhopal Development Authority to start construction of yet another building for Rs 2 crore.Various Queries: From where did the promise of new capital come? And – as many in Herald are asking now – if money was at all available, why wasn’t it used to clear the debts to banks, the Government and the employees? However, Kapoor is not amused.Recently, he stopped deduction of provident fund for all employees drawing over Rs 1,600 a month on the plea that the Provident Fund Act allows him to do so – a contention not corroborated so far by the Fund authorities. Thus, he has escaped statutory obligations in every way on the plea of economy, but has still managed to go ahead with his grandiose ‘expansion plans’.Last fortnight, Kapoor, talking to India Today, admitted that the buildings were to be financed by a “group of businessmen” who would “not charge Herald a rupee”. But he was silent on:whether this transaction would be shown in the company’s books of account and, if so, how;why the concerned businessmen offered to make contributions; and,how business in real estate was consistent with National Herald’s memorandum of association.Brushing these issues aside, Kapoor said: “The main task is to make Associated Journals Limited immune to the Congress Party’s vicissitudes of fortune. We were victims of a systematic witch-hunt during the Janata period, when our advertisement earnings were forcibly lowered, our workers were instigated to go on strike, and the paper was dragged into a tangle of false litigations.The buildings will allow us relative independence even when the Congress is out of power. We want to be free from financial worries for all time to come.”Both Kapoor and Jaisingh claim to have gone a long way in ‘professionalising’ the organisation. “We’ve been objective in our reporting and fair in our editorial views, within certain parameters, of course.” defensively argues a mild-mannered Jaisingh. “We even print Opposition news.” piped in Kapoor more bluntly.However, as a senior journalist in the paper remarked, “Herald projects only two leaders, if you may say so: Mrs Gandhi and Yashpal Kapoor.” In 1981, Kapoor’s statements and photographs were front-paged over 50 times in the paper, variously describing him as “senior Congress leader”, “prominent leader of the Indian National Trade Union Congress”, and “leading social worker”.Quipped the journalist, “For the readers of the Herald – not a large community, I dare say – the race between the prime minister and Kapoor is quite a photo finish, with Rajiv Gandhi coming in as a distant third.”Toeing The Line: On reporting political issues, the paper often toes the Congress(I) line in quite a brazen-faced manner. On the eve of the Opposition-sponsored Bharat Bandh on January 19, its two main front-page headlines read: “Government to be tough on coercing strikers” and “More to ignore bandh”.When the Maharashtra chief minister, A.R. Antulay lost his case at Bombay High Court and resigned, the editorial in National Herald merely sang paeans of praise to Mrs Gandhi for being “democratic” in accepting Antulay’s resignation.However, its closeness to the Congress(I) gives it occasional flashes of insight: it was the only daily to predict the latest round of reshuffles in the Union Cabinet (see cover story) on the morning it took place.It is true that there have been confusing trends once in a while; like the Herald suddenly publishing an article by T.N. Kaul criticising the recent International Monetary Fund (IMF) loan. But insiders promptly put it down to “editorial ignorance” of which way the wind was blowing.A front-page article criticising the Congress(I) chief ministers’ frequent trips to Delhi was explained by them as a subtle attempt to “wangle” state government advertisements.However, to ask the Herald authorities about its circulation – like asking a woman her age – is considered impolite. Though Jaisingh claims a weekday circulation of 20,000-plus in the capital and 30,000-plus in Lucknow, a representative of the National Herald Employees’ Union averred that the combined daily sale was “within 15,000”.On such a slender circulation base, how the paper brings out 10 to 12 supplements – loaded with ads – in a month is a mystery in the newspaper circle. In 1980-81, it netted Rs 1.25 crore from advertisements. As Kapoor fondly mused, “Our ad and circulation boys are simply brilliant.”That again is a mystery. Last year, both the circulation and advertisement managers of the company quit their posts. The new circulation manager, who was catapulted to the office, was once a timekeeper in the Lucknow office, while the new advertisement manager was a clerk in the advertisement department.In fact, examples of such spectacular rises are legion at National Herald: a sub-editor overnight finds himself in the chair of a leader writer, a junior sports sub is suddenly anointed as the sports editor, a lino operator takes over as the chief press supervisor.Chalapati Rau, who had once in disgust burnt copies of the paper at the site of Nehru’s cremation at Shantivana, remarked: “The National Herald’s only editorial policy is to sing bhajans to Indira Gandhi and Yashpal Kapoor; its only business policy is to plunder resources and to secure ads by blackmail.”Firmness: Rau has a right to vituperate. During the Emergency, when he was the chief editor, he did not allow any statement or photograph of Sanjay Gandhi, then all-powerful in the Congress, to appear in the paper. He refused to draw a salary of more than Rs 2,000 a month (Jaisingh gets Rs 8,000, including perks).Even Mrs Gandhi used to fear the sharpness of his tongue and the acid in his pen. In 1978, he was thrown out of office, and, since then, Kapoor has taken care to see that his Rs 1,500 monthly pension is stopped.Even a member of the Jan Hit Nidhi Trust, who refused to be identified, agrees that the paper has little viability unless “we choose between two alternatives: to run it as a purely professional organisation, or to run it as a completely above-board party organ, free from wheeler-dealers’ interference”.He cited the example of Hindustan Times, which started as a mouthpiece of the Gadr Party but later on became a commercial organisation under the Birlas, and survived. At the other end of the gamut, the two communist parties, he said, have been able to continue with their respective party organs without undue reliance on advertising revenue.But the Herald, with its 900 staff, and its management’s all-consuming desire to turn it into a money-spinner, cannot but choose a half-way house from where it has to increasingly lean on non-newspaper profits: in 1980-81, it earned Rs 20 lakh by renting out its premises in Delhi.”No newspaper”, said the sceptic trustee, “has ever been profitable by propagating the views of one political party.” Evidently not impressed by this line of argument, Kapoor counterposed, “If the Congress can be a viable party, why can’t National Herald be a viable paper?” No wonder that the current joke at the Herald office is to whisper aloud: “We want Antulay”. read more