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Saturday, 5 April 2014

Kings of sting operations Cobrapost, Gulail, Media Sarkar low on credibility, prefer "non-profit" status

Ravi Teja Sharma, ET Bureau Dec 7, 2013, 07.00AM IST
 NEW DELHI: They say they begin where the mainstream media ends, but the investigative portals that hog limelight every now and then with sting ops targeting the high and mighty are increasingly taking cover under a "non-profit" umbrella, which, among other things, can ease disclosure norms on their sources of funding.
Proprietors of Cobrapost, Gulail and Media Sarkar - three such media outlets in the news of late - say being a commercial enterprise is no more an option in the face of drying funds and hence the move to a non-profit structure where they can solicit tax-free donations.

However, according to legal experts, the transition can also make them less transparent. And many media professionals ET spoke to - not all of whom were willing to speak on record - said media ventures that make exposes their stated mission need to be seen as transparent themselves.

"We converted to a non-profit as we found it difficult to sustain investigative journalism in a commercial manner...There has not been an investigative non-profit in India so far. We are the first," says Aniruddha Bahal, editor of Cobrapost, who worked earlier with Outlook and Tehelka.

Around six months ago, Cobrapost transferred the ownership of its website to a society Forum for Media and Literature (FML) which is registered under the Societies Registration Act XXI of 1860, a British era provision under which most of the NGOs in the country are registered. Till this transition, was owned by a company called Sri Bharadwaaj Media Private Ltd (SBMPL) in which Bahal held 97% through another company Red Tiger Productions in which he has 99%. A foreign investor holds a small stake in Sri Bharadwaaj Media.

Cobrapost, Bahal says, has received about Rs 21.86 lakh in donations so far. He said lawyers Fali Nariman, Prashant Bhushan, broadcast media editor Ashutosh, polling agency C-Voter are among those who have donated money.

Bahal said FML is a very small organisation and its staff and other costs are les than Rs 3 lakh a month. "I don't take a salary," Bahal said.

Bahal's registered society's directors include Shri Dwarkanath (president), Satyashree Gandham (member), Disha Mehra (vice president), R Joshi (treasurer), and Laxmi Nalapat (member), Neeraj Roy, Prem Subramanium and others.

Bahal described his directors thus: "Shri Dwarkanath leads a retired life out of Bangalore, Satyashree is a senior producer who has worked with several news channels, Disha works in design and is a consultant, Laksmi is an author, Prem, a senior tourism consultant, lives a retired life close to Mysore. Neeraj is not a governing member. He is the CEO of" Roy told ET he knew Bahal in school and supported his venture.

Does all this add up to a transparent non-profit for investigative journalism?

For journalism through non-profit setups, transparency levels differ from country to country. Outfits like ProPublica in the US have to adhere to stricter transparency standards than their Indian counterparts because of the laws in America. ProPublica's website clearly states that it got a multi-year funding commitment from the Sandler Foundation at its launch and that it spends "85 cents out of every dollar on news".

In India, however, there is no central registry like the Registrar of Companies (RoC) to track registered societies. One cannot search for a society to know details about donors, spends, directors. It has to be done manually. "It's much less transparent than setting up a company. I'd say only about 20% transparent compared to companies," says a prominent tax lawyer, who did not wish to be named.

Cobrapost's Bahal begs to differ here. "Which law says that they are only 20% transparent? They are under the control of the registrar of societies for compliances under the Societies Registration Act. In so far as the Income Tax Act is concerned, they are subjected to the same scrutiny as any other assessee," he replied in an email to ET.

Registered societies in India do have to register with Income Tax under Section 12A to be exempt from paying income tax and can get registered under Section 80G which will allow its donors to get income-tax exemptions on their money they donate. The income tax details, however, do not come under the Right to Information Act.

Independent journalist Paranjoy Guha Thakurta says if these companies want others to be transparent, they should be transparent too.

Sevanti Ninan, the editor of media watch website, says the society model is one which may get you financial backing of a different kind. "Here the law doesn't compel you to declare your donors and other details but if you say you are doing public service then there should be transparency," she says. The Hoot is also run by a society called Media Foundation and details about its members are published on the site.

The two other outfits in news for stings - and - are recent entrants.


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