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A battle is brewing in the families which run the Jagran group of newspapers. The group's flagship brand, Dainik Jagran, is the country's largest circulated newspaper.
Sanjiv Mohan Gupta, who controls a 15 per cent stake in Jagran Publication Pvt Ltd, has written to the Foreign Investment Promotion BoardĀ to reject a proposal of Jagran Media Networks, promoted by the P C Gupta family, to transfer shareholding to Blackstone GPV Capital Partners (Mauritius).
Sanjiv Gupta is part of the G D Gupta family, which together controls a 60 per cent stake in JPPL. Jagran Prakashan Ltd (JPL), promoted by the P C Gupta family, owns 40 per cent stake in JPPL, an associate company of JPL; both families have equal representation on the JPPL board.
The Blackstone Group intends to invest up to 12.83 per cent of the post-issue capital of JMN, an amount of Rs 225 crore, against issuance of equity shares and convertible debentures of the company.
FIPB is due to the proposal on Monday.
JMN has been promoted by Sameer Gupta and Shailesh Gupta, who with other members of the P C Gupta family are also the promoters of JPL. The family owns 63 per cent of the shares in JPL. JPPL publishes the Jagran editions in Bhopal and Rewa in Madhya Pradesh. JPL publishes 33 editions across 11 states, which include Uttar Pradesh.
Sanjiv Mohan Gupta, director, JPPL, told Business Standard: "The trade name, Dainik Jagran, is co-owned by the three families, descending from J C Arya, P C Gupta and G D Gupta. Transfer of shareholding through foreign equity in JMN without requisite approval from associate companies would result in brand dilution and affect us adversely."
He added, "By the family arrangements and agreements reached in 1976, various conditions were set out for use of the trade mark and trade name Dainik Jagran. These have been violated by family members of P C Gupta and the company, Jagran Prakashan Ltd."
His views have been contested by R K Agarwal, chief financial officer of JPL. "Jagran Prakashan Ltd is publisher of Dainik Jagran for more than 35 years and is an absolute owner of the brand. For all the editions of Dainik Jagran published across the country, it holds RNI (Registrar of Newspapers of India) certificates. In addition, trade mark and copy right certificates for Dainik Jagran are also held by JPL. Therefore, I am unable to understand how there is violation of any sort. There is no agreement between JPL and any third party as alleged, nor has any family arrangement affected JPL's rights," he said.
Sanjiv Gupta said the right of JPL to use the Dainik Jagran trade mark was under challenge in a civil suit and the matter was before the High Court of Delhi. Transfer of equity by JMN to Blackstone would complicate the issues and create third-party interest in the subject matter of the suit.
Agarwal's response: "There is no transfer of shares envisaged at all in case of investment by BlackstoneĀ Jagran Media Networks Pvt Ltd currently does not have any relationship with JPL, except that the promoters are common, which is not unusual. Also, the ongoing litigation has no bearing whatsoever on transfer or sales dealing in shares of JPL, as the same is not the subject matter of the suit filed by the petitioners." The letter written to FIPB was by a shareholder who was also a director of JPPL and had not been authorised to do so by that company, he added.
