A few days ago, I read a news story on SEBI directions to Media companies about 'Private treaties" between these companies and companies coming out with public issues. It seems that the media companies entered into agreements with companies which were planning issue of shares to public. Under the agreement, the media allowed the issuing firms to place advertisements in the media and in exchange, provide shares of the company to the media house. So, the ads were placed at no cost, instead the company gave shares to the media company. Now services in exchange of equity is fine, but when the receiver is a media house, then a lot of questions are raised.
SEBI has now directed the media companies to disclose such agreements. This is fine. But, what about past agreements? By accepting such shares, the media becomes an interetsed party in promoting the company. They are no longer a neutral reporting entity. Such acts cast a long shadow on the reputation of media personalities. When the media describes an IPO as worthwhile or similar, was it giving an honest opinion or was it trying to push the value of shares owned by it?
I am dismayed when I come across such news. It seems that 120 crore Indians are surviving somehow amidst a sea of corruption.