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Tehelka hopes to raise $3 million by selling shares

Tehelka.com, the news web site whose investigations into corruption in defence deals rocked the Indian government, said on Monday it hoped to raise at least $3 million by selling shares to its supporters.

Earlier this month Tehelka launched an appeal for funds to pursue "public interest journalism", saying it was fighting for survival after its sensational sting operation.

But it will now offer 20-25 per cent of its Rs 700 million equity to "friends and personal contacts", issuing one share for every Rs 1,000 received. The shares will not be listed on any exchange.

Two months ago Tehelka.com released secretly shot video which showed politicians, military officials and bureaucrats apparently accepting money from journalists posing as arms dealers.

The scandal led to the resignation of the defence minister George Fernandes and the president of Prime Minister Atal Behari Vajpayee's Bharatiya Janata Party, Bangaru Laxman.

Last year the maverick news service carried out a sting on cricket match-fixing that shook the game to its foundations.

Tehelka Editor-in-Chief Tarun Tejpal said he was hoping to raise at least Rs 140 million, and possibly up to Rs 200 million, from "a whole slew of Indians around the world".

In the advertisement for its fund appeal, the website said that its now-celebrated Tehelka Tapes had spawned letters, e-mails and phone calls of support from around the world.

"But at the same time we have also had to face the brunt of an incensed government; and among other things we find our associates cornered, and our credit lines choked," it said.

"In a way we find ourselves fighting for survival. As it is, we are a very small and independent media group, and our resources are limited and were in fact stretched to the limit with our last major story."

The arms procurement story cost Tehelka Rs 1.1 million, and Tejpal said that with more money its journalists could have probed further into a web of bribery and influence-peddling.

Tehelka.com is now 100-per cent owned by media firm Buffalo Networks Private Ltd. It will become Tehelka.com Ltd after its equity dilution, details of which are still being worked out.

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