UNI UNION

Monday October 10, 2006

Digging of the UNI Sale Deal-2

In continuation of the process of 'due digging ' (For buyers it may be due diligence), we are producing two letters sent to the UNI Chairman by Mr. Bharat Patel, Managing Director of the Bhopal-based, Sandhya Prakash Limited.

The first is dated August 31, 2006 and the second is of September 4,2006. Mr. Patel expressed his interest to purchase UNI's shares and formally offered Rs 40 crore to buy these shares in his second letter.

Here lies a catch and apparently a fraudulent deed to affect UNI's sale deal. Now ask UNI Chairman and other directors of the company how could they consider and reject Mr. Patel's offer in the UNI Board meeting on September 2,2006, two days before it was sent.

Not only that the report of the sub-committee of directors of United News of India presented in the Board meeting on September 2, 2006 mentioned that while the bid of Mr. Patel was the lowest, the bid of the Mediavest India Private Limited of Mr. Subhash Chandra was the highest.

So, it was another fraud. Also ask, was there any effort to ensure competitive bidding. and whether these bids were opened in a transparent way. Was it just a financial bidding or was there any 'technical' bidding also.

And also ask why The Statesman's nominee in the UNI Board, Mr. Ravindra Kumar was allowed to participate in the three-member sub-committee headed by the UNI Chairman Mr. Manoj Kumar Sonthalia and constituted pursuant to a decision of the Board of Directors at its meeting held in New Delhi on 21st August2006. Just because Mr. Kumar, accompanied the Chairman on a flight to New Delhi from Kolkata, he was allowed to put his signature on the sub-committee's report which we had posted on this website on Saturday last.

And last but not the least, how can two other members of the sub-committee, Mr. Mahendra Mohan Gupta and Mr. Naresh Mohan could deliberate and or vote on this matter which involved as a party one of their relative, Mr. Subhash Chandra. Do we need to prove all three are relatives of each other?

We had told you in the first part of our very special posting, Digging of the UNI Sale Deal -1 that we shall soon come out with some more documents to prove beyond any doubt that the deal is an utter violation of the fundamental principles of Corporate Governance.

And so, please read carefully Mr. Patel's first and second letter to the UNI Chairman. If fact, he sent two more letters, dated September 15, 2006 and September 20, 2006 to the UNI Chairman. We are making first two letters public, without even correcting spelling mistakes in them. We shall also make public in due course Mr. Patel's other two letter and a letter to him by Mr. Sonthalia .

Sandhya Prakash Limited Sandhya Prakash Bhavan, Malviyanagar
Bhopal-462003 (M.P) India
SPL/uni01 31 Aug 06,

To,
The Chairman
United News of India
9 Rafi MargNew Delhi 110001
Sub: Investment in UNI

                                       
Dear Sir,
We understand that UNI is exploring an investor to invest the sizable amount in the company, in the shape of Equity/Loans.

We as Dainik Sandhya Prakash are keen to invest in your company UNI.Please let us know the details with regard to the Price of Equity Share's of the company. We would appreciate if you kindly let us know the time for meeting you in person to discuss the issue in length and get some more detailed information.
Thanking You
Yours Truly
(Bharat Patel)

SandhyaPrakashLimited
Sandhya Prakash Bhavan, Malviyanagar
Bhopal-462003 (M.P) India
SPL/uni 02
4th Seprember 06,

To
The Chairman
United News of India
9 Rafi Marg
New Delhi
Sub: Purchase of Equity Shares of UNI

Respected Shri. Manoj Kumar Sonthalia ji,
With reference to our letter No. SPL/uni 01 dated 31 August 2006 and subsequent discussion with your good-self and your committee, We are pleased to offer Rs 40 Crores for purchase of 14811 equity shares for holding 59.2 % share holding of UNI .

This total amount of Rs 40 Crores is offered as equity. We request the Honorable Board to accept my offer.

We are enclosing herewith a Cheque No 831321 dated 4th Sept. 2006 of Punjab National Bank for Rs 400,00,000/- (Rupees Four Crores Only) as token advance showing our serious intention.

The balance amount of Rs 36 Crores will be paid within 30 days after receipt of confirmation of acceptance from your office.

Thanking You
Yours faithfully,

BHARAT PATEL
Managing Director

Posted by UNI Employees' Federation (UNIEF) at 7:32 PM 

Friday, October 06, 2006

Digging The UNI Sale Deal -1

We are producing an official document of the UNI Board; dated 2nd September 2006.It is related to the UNI sale deal. And to say the least it is only a tip of the iceberg. More is in the offing in due course.
We shall soon come out with some more documents to prove beyond any doubt that the deal is an utter violation of the fundamental principles of Corporate Governance and as rightly termed by the CPI (M) Polit Bureau member Brinda Karat, "a big scam". In fact she understated the most obvious.
And so, watch out for more skeletons to stumble out through the process of the 'due digging’ of the deal by UNItes and 'Friends of UNI'.

REPORT OF THE SUB-COMMITTEE OF DIRECTORS
UNITED NEWS OF INDIA
1) Background
1.1 This sub-committee was constituted pursuant to a decision of the Board of Directors at its meeting held in New Delhi on 21st August2006, to take steps for revival of the company through induction of funds, in the form of equity or debt, or a combination of both, and to recommend action thereof.

1.2 The committee met at 10.30 am in New Delhi today. The Chairman informed the committee that Mr. Ravindra Kumar; Director of the company and twice a past chairman had traveled with him to the city from Kolkata. The chairman said that he had taken the liberty of inviting Mr. Kumar to attend the deliberations of the committee later in the day so that the benefit of his advice was also available. The other members of the committee welcomed the Chairman's initiative.

1.3 The Chairman informed the committee that three parties had expressed interest in reviving the company through participation inequity & debt. After due deliberations, it was decided that the offers of the parties would be considered on the basis of the following criteria and would be marked on a scale of 1 to 10:

a) Background of the party
b) Experience in multi-media operations
c) Range of media-related business activity
d) Acceptability with existing and potential customers

e) Business plan for revival of the agency

1.4 It was further decided that thereafter the offers would be considered on the basis of commercial terms being offered by the various parties. It was also decided the technical and commercial aspects of the various offers would be given equal weight age.

2. Consideration of Offers
(A) Guiarat Samachar: The sub-committee (comprising Shri ManojSonthalia, Shri MM Gupta and Shri Naresh Mohan) first met the representative of Gujarat Samachar.

Gujarat Samachar had vide their letter dated 22nd Aug 2006 offered to provide funds to the tune of Rs 25 crores in the form of equity and debt, to revive the company. In their letter, they made the following submissions in respect of the revival plan:

1. Reduction in the expenditures of staff
2. Development of real estate and raising the rental income
3. Modernization and diversification in electronic services
4. To raise the additional income by way of providing research based business and financial service.
5. To explore the possibilities of expansion programme in the field of feature news, video clippings and to tie up with foreign video news.
6. To explore the new avenues in the media world in the present scenario of globalization and to expand the activities of the agency.

During discussions, their representatives mentioned that they would invest Rs 17 crore as equity and Rs 8 crore as debt in the form of interest-free debentures. Asked if this was their best offer, they indicated that they may increase the amount to Rs 27-28 crore and be flexible on the quantum of equity and debt

*By this time Shri Ravindra Kumar had also joined the deliberations.

(B) Mediavest India Private Limited: The company had vide their letter dated 9th Aug 2006, indicated procedure for valuation of the assets minus liabilities of the company for subscribing tounsubscribed part of the authorised capital of the company and for management control.

Their representative indicated that Mediavest, were one of the promoters and publishers of the Mumbai-based newspaper DNA and apart of the Zee TV network of Shri Subhash Chandra. They proposed to revive the company with the cooperation of existing shareholders. and that the revival plan would comprise, inter alia of the following:
1. Repositioning UNI as a pan-Asian provider of news; 2. Expanding operations so as to provide audio-visual news feeds toTV channels/subscribers, and
3. Deriving strategic advantage for the company through optimization of UNI's infrastructure resources

*The sub-committee mentioned to the representatives of Mediavestthat instead of getting valuation done as proposed by them the sub-committee would like them to offer a fixed price for theunsubscribed part of the authorised capital.
The company submitted a written offer vide letter, dated 2nd Sept, 2006 offering to subscribe to 14811 shares (59.24%) of the authorisedcapital of the company at a consideration of Rs.32.04 crores.

(C) Sandhya Prakash , Bhopal: The representative of the company mentioned that their business activities included ownership of an evening newspaper in Bhopal, interests in printing and packaging, and franchised printing operation of The Hindustan Times in some centres.

The committee was informed that they proposed to revive UNI by arranging to conduct motivational workshops by Shri Shiv Khera, a management expert, and first give an opportunity to existing employees to improve their performance. Thereafter, they said that such employees as did not improve their performance would be asked to leave the organisation. Finally, they would engage Cynamid, consultancy firm for assistance in restructuring operations.
They offered Rs 25 crore, in the form of equity and debt, as consideration for 59.24% of the authorised capital of the company. Asked pointedly if they would consider revising their offer, they said they might consider going upto Rs 30 crore but were not in aposition to commit.
3Evaluation of Technical Aspects
After due deliberations, the sub-committee decided to rate the various offers on the basis of criteria spelt out in 1.3 hereinabove as follows:
A B C D E Total
i Gujarat samachar 8 6 6 4 7 31
ii Mediavest 8 8 8 7 8 39
iii Sandhya prakash 5 3 3 3 6 20

4. Evaluation of commercial (Price) Aspects
On the basis of consideration offered, the three parties were ranked as follows:
i Mediavest Rs 32.04 crore
ii Gujarat samachar Rs 27-28 crore
iii Sandhya prakash Rs 25 crore

5. Recommendation
On the basis of this evaluation, therefore, the sub-committee was of the considered opinion that the offer received from Mediavest India Private Limited was the best both in respect of technical aspects and price, and therefore decided to recommend to the board of directors that their offer be accepted.

(Manoj Kumar Sonthalia)
Chairman

(Mahendra Mohan Gupta)
Director

(Ravindra Kumar)
Director

(Naresh Moban)
Director
2nd September 2006