India's stock market regulator, the Securities & Exchange Board of India has taken up the issue of private treaty deals between media groups and companies preparing for an IPO. According to such deals - an example here, of Mobile VAS company Planet 41 - a company gives stake in return for "media coverage through advertisements, news reports, advertorials etc. in the print or electronic media". This results in a case of conflict of interest, and a dilution of the independence of press. SEBI believes that such "biased and motivated dissemination of information, guided by commercial considerations can potentially mislead investors in the securities market. Such journalism would not be in the interest of securities market." SEBI knows of the manipulation of stock prices using the media only too well, as in case of the Nirmal Kotecha-Pyramid Saimira issue. The stock exchange regulator has suggested the following guidelines to the Press Council of India: 1. Disclosures regarding stake held by the media company should be made in the news report/ article/ editorial in newspapers/television relating to the company in which the media group holds such stake. 2. Disclosure on percentage of stake held by media groups in various companies under such 'Private Treaties' on the website of media groups should be made. 3. Any other disclosures relating to such agreements such as any nominee of the media group on the Board of Directors of the company, any management control or other details which may be required to be disclosed and which…
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