MUMBAI: Not to be cowed down in the alleged Rs 1 billion extortion case, Zee group chairman Subhash Chandra Sunday said he would file a defamation case against Congress MP Naveen Jindal?s company.

Chandra, who was earlier questioned by the Delhi police for the second consecutive day, told reporters that he would cooperate with the police if they called him again. "The questioning "has ended as of now", he added.

Chandra had come along with his son Punit Goenka to the Delhi Police Crime Branch office in the afternoon for the questioning. While Goenka was allowed to leave after a short period, Chandra was grilled for hours.

Chandra said he had no knowledge about the case and came to know about it five days (7 October) after the first information report (FIR) got registered by Jindal.

"There is no Rs 100 crore deal. We haven?t been saying anything," Chandra explained. "It is an attempt to prevent news reports on the coalgate scam."

Zee editors Sudhir Chaudhury and Samir Ahluwalia, who had been remanded to two days? police custody by a court for the alleged extortion bid, were brought to the Crime Branch office last night where Chandra and his son were being questioned.

The Jindal company had alleged that the Zee group tried to extort Rs 100 crore (1 billion) in exchange of not running negative stories about the company?s alleged involvement in the coal blocks allocations controversy.

On Sunday, Chandra was brought face-to-face with Chaudhary and Ahluwalia.

Earlier on 6 December, a court had granted Chandra and Goenka interim protection against arrest till 14 December.

NEW DELHI: Zee Group chairman Subhash Chandra and his son and Zee News managing director Punit Goenka were today granted interim protection from arrest by a Delhi court till 14 December in the Rs one billion alleged extortion complaint filed by Congress MP and industrialist Naveen Jindal?s firm against two editors of Zee news channel.

Additional Sessions Judge Raj Rani Mitra said the question of extension of interim bail would be decided on 14 December.

The judge passed the order after hearing arguments on the anticipatory bail plea of Chandra and his son, in which their counsel pressed for interim protection from arrest for joining the investigation. They have been asked to appear before the Delhi Police on 8 December.

Senior advocate Geeta Luthra and Vijay Aggarwal, appearing for the duo, had contended that their clients are ready to join the probe if the police give them the assurance that the two will not be arrested during the time of interrogation. "We (Chandra and Goenka) will join the investigation as has been asked by the police for 8 December and even before, if required.

"But, if the police decides to arrest us, then it should give at least five days? time so that we can argue the matter at length on some other day," the counsel argued. They had also said that their clients should be granted protection so that they can join the probe without fear of arrest.

Special Public Prosecutor Rajiv Mohan opposed their plea saying, "We cannot commit or assure that they (Chandra and his son) will not be arrested. The moment we get a lead of the alleged extortion made on behalf of Zee Group by their two editors, we will arrest them."

The prosecutor contended that the investigation till now and the evidence point towards the alleged involvement of Chandra and Goenka in the whole conspiracy.

He also said the two jailed editors (Sudhir Chaudhary and Samir Ahluwalia) have not acted alone and that the whole episode was planned in collusion with the seniors of the Zee group in a conspiracy hatched to extort Rs 100 crore for their channel.

Both Chaudhary and Ahluwalia, presently lodged in Tihar jail, have been booked under section 384 (extortion), 420 (cheating), 120 B (criminal conspiracy) and 511 (punishment for attempting to commit offences punishable with imprisonment for life or other imprisonment) of the Indian Penal Code.

A Delhi court had on 28 November rejected the bail plea of ZNL editors, Sudhir Chaudhary (Zee News) and Samir Ahluwalia (Zee Business), and sent them to two-day police custody till 30 November.

Sudhir Chaudhary and Samir Ahluwalia were arrested on 27 November on charges of extortion by the crime branch of Delhi Police on an FIR filed by a JSPL official last month.

The company alleged that ZNL editors Chaudhary and Ahluwalia had demanded Rs 1 billion worth of advertisements from the company in return for favourable coverage in the scam involving allotment of coal blocks, wherein JSPL is one of the companies that allegedly made windfall gains from arbitrary coal block allocations.

Earlier, the Broadcast Editors? Association (BEA) had removed Zee News editor and business head Sudhir Chaudhary from the post of treasurer and primary membership of the body after a three-member committee set-up to probe the matter had found the two acting in an in-appropriate manner.The removal followed a sting operation carried out by Jindal?s company during meetings in a Delhi hotel.

The video recordings from a hidden camera purportedly showed Zee Business Editor Ahluwalia demanding money from Jindals in exchange for going soft on coverage of alleged involvement of Jindal?s firms in the coal scam.

MUMBAI: Subhash Chandra-owned Zee Entertainment Enterprises Ltd (Zeel) reported a 17.2 per cent rise in consolidated net profit for the quarter ended 30 September helped by a strong growth in revenues. Its net profit on a standalone basis for the second quarter, however, was down 42 per cent on a sharp rise in expenses.

Zeel‘s consolidated net profit in the second quarter was Rs 1.87 billion compared with Rs 1.59 billion a year earlier as its operating revenues rose 33.8 per cent to Rs 9.53 billion compared with Rs 7.12 billion a year earlier.

The company‘s net profit on a standalone basis in the second quarter was Rs 679 million, down from Rs 1.18 billion a year earlier as rise in expenses far outstripped growth in operating revenues. Its standalone operating revenues during the quarter was up 22 per cent at Rs 6.36 billion from a year earlier against a 47 per cent rise in standalone expenses year-on-year at Rs 5.40 billion.

The company‘s standalone businesses include entertainment and sports business in India.

CONDENSED STATEMENT OF OPERATIONS

ZEEL‘s revenues from sports business more than doubled to Rs 1.81 billion in the second quarter from Rs 881 million a year earlier. Its revenues from businesses other than sports which include a bouquet of entertainment channels was up 23 per cent at Rs 7.72 billion in the second quarter compared with Rs 6.24 billion a year earlier.

The company‘s consolidated advertising revenues at Rs 5.28 billion were 33.7 per cent higher than a year earlier contributed significantly by sports business, while subscription revenues rose 35.7 per cent to Rs 3.95 billion from a year earlier. Domestic subscription revenues stood at Rs 2.81, while international subscription revenues were Rs 1.14 billion.

Zeel said its consolidated operating profit for the second quarter was Rs 2.17 billion, 7.8 per cent higher than a year earlier. Its operating profit margin for the quarter was 22.8 per cent.

Zeel chairman Subhash Chandra said. "This (second) quarter the company has continued to build on the momentum set in the first quarter. We look forward to continuing our investment in the television media space and take advantage of the growth opportunities ahead of us."

The company expects television advertising spends to turnaround after having been impacted this year by the economic slowdown.

"We are confident of continued double digit growth of television advertising spends over the next few years. At ZEE, we have created a good portfolio of assets and will continue to make prudent investments with a clear focus on returns over the long term," said Zeel managing director and CEO Punit Goenka.

MUMBAI: Zee Entertainment Enterprises Ltd?s (Zeel) financial performance has grown in strength in the five years since 2007-08, the year that saw the Subhash Chandra-promoted group?s flagship channel Zee TV swell its share in general entertainment by 56 per cent to 26 per cent amidst stiff competition.

Zeel, which pioneered private sector television entertainment 20 years ago, has seen its income in 2011-12 rise to Rs 30.405 billion, 65 per cent more than in 2007-08, while its net profit increased to Rs 5.891 billion, 53 per cent higher than five years ago. The income and profit figures increased as it kept a tight control on programming cost. Its programming cost to income from operations was 37.4 per cent compared with 28.2 per cent five years ago.

The last two years have also seen Zeel turning into a zero debt company with loans to effective networth dropping from 13.5 per cent in fiscal year 2008 to zero in fiscal year 2011.

Zeel?s share of advertisement income and subscription income has nearly been at the same level over the last five years, which suggests that the advertisement revenue has kept pace with the growing subscription revenue. The share of advertising revenue in fiscal year 2012 was 52.1 per cent compared with 50.7 per cent five years ago.

As the Subhash Chandra television entertainment group continued consolidating its financial performance, the company?s market capitalisation has swung back to the end-March 2008 level. The global financial crisis in the second half of 2008 had caused its market cap to sink to Rs 46.157 billion at the end of March 2009 from Rs 106.072 billion a year earlier. At the end of March 2012, Zeel?s market capitalisation was Rs 123.202 billion, 14 per cent higher than the pre-2008.

The operating profit margin in fiscal year 2008 was the highest in the last five years. The television entertainment group is yet to reach the operating profit margin of 30 per cent achieved during the year. Its operating profit margin in the fiscal year 2012 was 24 per cent, down from 27 per cent in fiscal year 2011 and 28 per cent fiscal year 2010.

"The sports business losses have somewhat dragged down the overall Ebitda level. But Ebitda from non-sports business is still significantly higher and ended at 34 per cent in the first quarter of this fiscal," said a media analyst.

Fiscal year 2009 saw improvements across key operating metrics of Zeel. Its net profit for the year at Rs 5.124 billion was 34 per cent higher than a year earlier, on an 18 per cent year-on-year increase in income from operations to Rs 21.773 billion. This was also despite a drop in operating profit margin.

The fiscal year 2010 was a year of creating operating efficiencies for Zeel, which helped it reduce expenses by 2.63 per cent year-on-year to Rs 15.863 billion. The income from operations during the year had remained flat at Rs 21.998 billion.

The performance in 2010 was a result of a conscious decision to focus on cash flows and improve earnings, which was well complemented by programming properties and distribution strengths from cable and reach of pay TV.

Zeel made the most of the digital drive led by the exponential growth of direct-to-home television, which had made it possible for cable and satellite television to reach 80 per cent of the TV households in the country. In the fiscal year 2011, Zeel?s income rose 36 per cent to Rs 30.088 billion from Rs 21.998 a year earlier.

In the fiscal year (2012) just before it entered 21st year of its operations, Zeel?s profitability was hit by curtailed advertisement spends caused by a slowing economy amid a global financial crisis for the second time in the last five years. Its income in the fiscal year 2012 was nearly flat at Rs 30.405 billion, while its net profit shrunk to Rs 5.891 billion from Rs 6.369 billion.

As Zeel managing director and CEO Punit Goenka puts it, the company?s financial performance has been stable in fiscal year 2012, having touched Rs 15.8 billion of advertising income and Rs 13.2 billion of subscription revenue.

Beginning with one channel in 1992 to 31 channels today and counting, Subhash Chandra‘s Zee Entertainment Enterprises Limited has indeed come a long way.

Indiantelevision.com spoke to industry vetarans like Kunal Dasgupta, Shashi Sinha and and some of the former Zee employees to trace back Chandra‘s dynamism and the company‘s history.

Former MSM CEO Kunal Dasgupta

On Subhash Chandra and Zee?s early life

Through the early stages and the difficult years, it was Subhash Chandra‘s vision and dynamism that helped the company get through and create a brand.

The most important thing to note about Zee is that they survived the initial pangs and have become a permanent part of the Indian media landscape. Despite the presence of multinational media companies, they survived the onslaught and have become successful.

On competitive spirit of Chandra:

Chandra was always a strong competitor. There was never any question that Star, Zee and Sony were here to stay. I think that the perception that Zee was up and then down and came back again was only a media creation. In reality these three companies have always been successful.

On media business being promoter-led:

A media company has to be promoter-led and not just be professionally run. There has to be an entrepreneurial spirit. You have to take risks. That is how a media company will thrive. If there is no risk taking appetite, you will stagnate.

Lodestar UM CEO Shashi Sinha

I think Subhash Chandra has done a great job. To have a vision to think through and to have a perspective that would fuel Zee‘s growth.

At that time only Doordarshan was there and they hardly used to sell; you had to stand in queues for slots. So, to create something like this was so magical. As global giants Star and Viacom are there, you need that entrepreneurial mindset to survive and grow. Chandra looked at languages, distribution and all the pieces of the media business. It is not easy to do everything in the beginning when the market is small and there isn?t enough money. But it was a good team and Ashok Kurian helped him at that point of time along with others.

Zee as a bouquet is very good. Chandra has set up a strong distribution network and he has got regional channels. One
channel going up and another going down is a minute detail, but he has consolidated the network very well . You can?t find a
bigger bouquet and they have been ahead of time. Before any other DTH operator came in, Dish TV was launched. They were the first ones to launch regional and set up a channel distribution outfit.

Chandra‘s son Punit Goenka is doing well too and he has a very good understanding of content.

For an Indian group to be so dominant and do so well, it?s a great achievement.

Essel Production head Nitin Keni

Zee?s beginning as a private broadcaster

Zee had a highly creative atmosphere in those early days and, being a new company, was less corporate. It was like ‘Do it first, Understand later‘.

Subhash Chandra was not just involved as chairman but also in every single thing because that was the beginning. He was practically there to give directions and guided us in major things.

That was the time when the whole country was getting liberalised. So I think that was also on his mind: that the Indian economy was opening up and Zee should start looking at the aspirations of the young people and the new society. We wanted Zee to be modern, young and aspirational.

Zee‘s movie production efforts

I was also part of the launch of Zee Cinema in 1995. There were lots of legal issues because there were many claimants to the movie library. So we had to be careful and bought rights directly from film producers.

Since there was a joint venture arrangement between Star and Zee, both of us were acquiring movies and they were pooled together. Zee already had a library of 2000 movies and Star also had acquired certain movies.

After I did my MBA from IIM, I joined NFDC because there were no private broadcasters at that point of time. I was very keen on cinema, so I started to make movies on my own. Zee also funded one of the films, Gadar. Though the movie was a box office hit, Zee never got the kind of returns it should have. Only the satellite rights gave Zee the true value.

In India, movie making is still not as organised as in other countries. Zee was not in film distribution, so in 2005 I tried facilitating that. I came as a consultant since I was running my own company at that time and we tried getting into distribution through a joint venture with Rajshri.

Why Zee did not make much progress in movie production? That is because Zee was focusing more on the television business (it‘s a 30 channel network today); the film business took a backseat. Zee floated a motion pictures arm in between but it did not work since it required a different kind of culture and organisation as compared to television.

On Subhash Chandra the visionary

Chandra dares to dream and he actually converts them into reality. I think he also created a platform for the next generation of media leaders to take the company global.

Chandra has given freedom to his CEOs; he curbs their wings also depending upon how they perform. He won‘t allow them to mess up with the company that he has built over the years.

Although he has passed on the baton to his son, he is very much guiding him and us. He continues to be passionate about media despite venturing into other growth areas like infrastructure.

Independent media consultant Kantaa Advanii

My six years at Zee have been a period of learning. Being a pioneer in the Hindi TV entertainment business in the country, we made our own rules and broke them. I was never faced with a situation where I was told not to try something new. So in that way, it was an extremely encouraging time that I spent at Zee.

I interacted more with Subhash Chandra when i was made head of sales for the entire network. Contrary to ‘rumours‘ at that time of him being an interfering boss, I found that he is a very hands on person and likes to keep track of what is going on in his company. He believed in letting people do their things and was present as a guiding force.

Another commendable thing about Chandra is the fact that he has a very shrewd idea of what might work and what might not. Despite this instinct, he never backed out of a calculated risk. He is a visionary and a part of this is his ability to take chances and face the consequences. In case of a failure, he took it in his stride.