India’s dynastic successions have virtually paralyzed some of the country’s biggest and most powerful institutions including the Reliance, Bajaj, Birla and Ranbaxy groups. Now it is the turn of the fifth-generation descendants of Kasturi & Sons Ltd, the public company which owns the influential 135-year old English language newspaper, The Hindu.
Brothers and cousins from four branches of the clan – the Narasimhan, Parthasarathy. Rangarajan and Kasturi familes, each with 25 percent equity shares – are locked in the bitter succession battle, which culminated in the ouster earlier this month of Siddharth Varadarajan, an internationally respected Indian-American journalist, as editor.
The looming Indian general election of 2014 is a major factor in the rush to take back editorial control of the paper, which dominates English language readership in the southern Indian states of Tamil Nadu and Kerala with a daily circulation of 1.5 million copies, generating US$200 million in annual revenues.
The incumbent Congress Party is expected to be turfed out. The political calculations of smaller parties for a coalition with the opposition BJP are churning old allegiances and forging new partnerships. The Hindu needs to reposition itself for the coming New Order. Dynastic families trade favors with political power.
The initial crisis was triggered in late 2011 by chief editor Narasimhan Ram, who resisted mandatory retirement at 65 for two years and then deftly bypassed family members for succession in January of 2012.
Ram discovers professional management At his retirement, Ram argued that proprietorship should be separated from professional management of the newspaper. He promoted Varadarajan, his Delhi bureau chief, as his replacement. Ram’s publisher responsibility was handed to K Balaji from the Kasturi family. Ram proposed a new post of CEO. Both the key editor in chief and chief executive officer roles went to N Ram’s non-family nominees.
The radical change to The Hindu’s leadership came in the context of decades of invented titles and jobs to accommodate the multiplying heirs of the four families. In editorial there are editor-in-chief, editor, joint editor, executive editor and deputy editor. In management there are chairman, publisher, chief executive officer and managing director. This tottering proprietorial load of bodies with hereditary entitlements rule a staff of 1,600.
Half of the 12-member board opposed Ram’s transitional engineering. They petitioned the Supreme Court to intervene, which politely declined. Similar to melodramatic movies which fascinate Indian audiences, The Hindu’s disputes unfolded as a classic family drama of shifting alliances, double-cross, power play and intrigue among brothers and cousins.
Ram discovered the merits of professionalism at the exact point of his reluctant retirement. Some members of the board saw it as foul play and bad faith.
N Murali, long-serving managing director and Ram’s brother, had this to say in his resignation letter to staff on reaching 65 in August 2011: “Any claim of professionalization in the appointment of Siddharth Varadarajan as Editor of The Hindu is a sham as professionally qualified and experienced family members on the editorial side — N Ravi, Editor, Malini Parthasarathy, Executive Editor and Nirmala Lakshman, Joint Editor — have been selectively targeted for removal. Double standards of the worst kind are at play.
“The unfairness of it all is evident from the fact that some next-generation family members, with little or no experience, have been fast-tracked into plum senior foreign postings with huge financial outgo, that normally only very senior journalists aspire to. The so-called theory of separation of ownership from management was suddenly sprung only to vindictively and selectively target a few individuals.”
Professionals axed after 20 months It now appears that N Ram’s “professional management” tactic was a ploy to buy time while he plotted his long-range board coup. In a dramatic public announcement on Oct. 22, Ram revealed the new structure of the company – he would be chairman of KSL and publisher of The Hindu, his brother N Murali would be co-chairman. His other brother, N Ravi, would be editor in chief. His cousin, Malini Parthasarathy would become editor.
Ram patched a truce within and between the Narasimhan and Parthasarathy families, which left the Rangarajan and Kasturi branches out in the cold.
The voting on the board resolution to remove the ‘professionals’ from their respective chief editor and CEO posts and reinstate the line-up from two families was split 6 for and 6 against. As chairman, N Ram exercised two votes for the resolution he stage-managed.
The dissenting directors declared their intent to challenge the chairman’s double vote as invalid. A note signed by them said: “The undersigned...declare this casting vote invalid and will contest the decision through an appropriate mechanism.” That euphemism is taken to mean application to the courts.
This cautionary tale reinforces the adage that blood is thicker than water. Families fight and reconcile with each generation. Outsiders are used as proxies and discarded as scapegoats when agendas of the warring factions morph. All too often, professionals appointed to power positions in family companies actually believe they have the mandate to independently change the old order. That is a fatal mistake.
‘Wrong decision’ As his justification for reversing the separation of ownership from management he championed earlier, Ram said: “We realized we took a wrong decision two years back and found we went off the rails on the business and editorial side.”
He went on to refer to alleged violations of the code of editorial values and disputes in industrial relations. Ram and Murali declared a bonus to staff which they claimed was unduly delayed by the CEO. The unions welcomed it. The CEO position was abolished. Siddharth Varadarajan resigned with immediate effect, declining the reduced position of contributing editor and senior columnist he was offered. Former CEO Arun Anant is awaiting his fate and pay-out.
Siddharth Vardarajan had reportedly banned political self-promotion from the front pages of The Hindu if the blah was not news worthy. That upset the politicos. N Ram must have had an earful from many of them. He could not say as owner he could not overrule the editor. The political stakes were too high for purist professional editing.
Both hero and villain Ram has a long history as a maverick editor who doesn’t hew to the political narratives of his time. He has been an unabashed apologist for Communist China from his student days in the early 1970s as vice president of the Students’ Federation of India which linked politically with the Communist Party of India (CPI-Marxist). He continues a chummy relationship with Prakash Karat, secretary-general of the CPI (M).
Ram wrote glowing articles on how China was bringing progress and modernization to Tibet, ignoring the CCP’s suppression of traditional culture, religion and the flooding of Tibet with Han Chinese immigrants.
Ram also celebrated the Sri Lankan military victory and subsequent consolidation of power over the Tamils who fought for autonomy of Jaffna province. That was truly counter-intuitive as The Hindu’s primary constituency in Tamil Nadu are Tamils. He was bestowed the Sri Lanka Ratna award by the Sri Lankan government – the highest honor for a non-national.
Ram’s greatest claim to fame was his brave expose of the Bofors arms procurement scandal in 1984 over which he had a public spat with his uncle G Kasturi who was then chief editor of The Hindu. G Kasturi blocked follow-up reports after the first detailed expose. The scandal reached the higher echelons of the Congress Party, the military establishment and singed the powerful Nehru-Gandhi dynasty.
N Ram seems destined to dictate his own history at The Hindu. He has so far out-manoeuvred the rest of the clan.