After nearly two years of courtroom battles and backstage negotiations, a resolution has finally emerged for the United News of India – a news agency that once challenged the PTI’s dominance in the media landscape.
The National Company Law Tribunal has approved a plan submitted by The Statesman Ltd, the publisher of one of India’s oldest English newspapers, to acquire the news agency for Rs 75 crore. The deal sounds straightforward on paper: Rs 72 crore to settle debts and Rs 3 crore as fresh capital to revive UNI. But beneath this seemingly clean resolution lies a human cost.
While the government will receive its Rs 16 crore dues in full and the State Bank of India will recover 64 percent of its relatively small Rs 2.1 crore claim, the agency’s current and former employees – who have been the backbone of UNI through its dark days – are set to receive just 22.35 percent of what they are owed.
In fact, this resolution represents the culmination of a process that began in 2022, when UNI’s employee union, driven to desperation by years of delayed wages and mounting dues, initiated legal proceedings against their own employer.
Another intriguing aspect of this resolution is that UNI’s would-be savior, The Statesman Ltd, is itself struggling to stay afloat. With the NCLT’s approval, The Statesman Ltd now assumes full control of UNI through a subsidiary set to acquire 100 percent of its shares. The transition is expected to be completed within 60 days.
During the legal proceedings, UNI’s fair value was estimated at Rs 61 crore and its liquidation value at Rs 44 crore, with 90 percent of this value coming from its land and buildings. There have been rumors about the UNI’s property at Rafi Marg in New Delhi being worth hundreds of crores, but most of this land is government-leased, tied up in legal disputes, or already reclaimed by authorities.
‘Little relief for employees’
While the NCLT’s approval has drawn the curtains on UNI’s insolvency proceedings, former and current employees claim the resolution plan has brought them little relief.
Speaking to Newslaundry, Mahesh Rajput, secretary of the Chandigarh union of UNI, claimed that under the plan he will receive only “eight percent” of the salary dues he is owed. “My own claim was around Rs 23 lakh, but under the [resolution] plan, I will receive only around Rs 1.85 lakh,” said Rajput, who has been working with UNI since 1999.
A former UNI employee echoed similar concerns. “From what I understand, we are getting gratuity and only eight percent of our pending salary. Even with gratuity included, my total payout would be just about 20 percent of my total claim,” he said.
Of the Rs 72 crore meant for settling dues, UNI employees will receive only Rs 23.3 crore against the Rs 104.37 crore they had claimed in the insolvency suit. The Rs 23.3 crore payment includes Rs 15.21 crore of gratuity dues and Rs 8.1 crore as final settlement for pending salaries and other dues.
While former employees are dissatisfied with the payment offered, the insolvency resolution professional appointed by the NCLT to manage the process, views the outcome differently.
Speaking to Newslaundry, Pooja Bahry, stressed that “most of the money in the plan will ultimately reach the employees.” “The Rs 16 crore in government dues is largely unpaid employment provident funds, which will directly benefit employees. Most of the Corporate Insolvency Resolution Process costs will also go toward employees who continued working during the insolvency process,” she claimed.
According to the resolution plan, of the Rs 72 crore set aside for settling dues, Rs 18 crore has been allocated for CIRP costs. But former employees say that this is not enough.
“Given UNI’s assets, the company could have negotiated a better deal, one which ensured full salary payments for employees who have worked for years without getting rightful dues,” said the former UNI employee quoted above.
Of the Rs 72 crore meant for settling dues, UNI employees will receive only Rs 23.3 crore against the Rs 104.37 crore they had claimed in the insolvency suit.
UNI union members have also raised concerns about the amount they will receive from the Rs 16 crore-employment provident funds that Bahry claimed would benefit the employees.
“There is no clarity on whether the full Rs 16 crore is meant for employment provident funds. Our contributions for EPFO [Employment Provident Funds organisation] haven’t been deposited since 2021,” said Mahesh Rajput. “Based on our calculations, the pending amount should be around Rs 4.5 crore, and the rest is just interest and penalties,” he further claimed.
Is UNI’s future secure with Statesman?
Since the insolvency process began in August 2023, UNI has been in news for reasons ranging from concerns over its future to speculation about potential buyers.
In February last year, reports suggested that Gautam Adani’s brother-in-law, Rakesh Ramanlal Shah, was interested in acquiring the news agency. Other names floated as potential bidders included The Statesman newspaper, BJP MP MJ Akbar on behalf of the Brain Trust of India, Kolkata-based Four Square Infrastructure, and former Chauthi Duniya editor Santosh Bhartia.
Ultimately, the NCLT order stated that by August 2024, three resolution plans had been submitted – by The Statesman Ltd, Care Education and Welfare Society, and Kundan Care Product Ltd. However, by September 2024, only The Statesman Ltd, one of UNI’s shareholders, had submitted a revised plan, making it the sole contender for the takeover.
After receiving NCLT’s nod in February, UNI has finally settled on a deal with The Statesman. But the road ahead is far from smooth.
While the resolution plan promises a fresh infusion of Rs 3 crore to revive UNI, Statesman itself has been running in loss for years.
As per its corporate filings, in 2023-24, The Statesman recorded a loss of Rs 2.21 crore. The year before that it registered losses worth Rs 2.87 crore. The total liabilities for The Statesman Ltd in 2023-24 stood at Rs 160.09 crore, equalling its assets.
However, Statesman’s management is hopeful of making UNI a “viable and potent” entity.
"Once we take over, we have some plans for its [UNI’s] revival and to make it a very viable and potent force,” Ravindra Kumar, managing director of The Statesman, told Newslaundry.
On how Statesman plans to resuscitate UNI despite running in loss itself, Kumar said, "We have had losses, but yes, we are treating this [UNI] as a special project. And we are raising the finance for it."
While Kumar said that it was “a little premature” to talk about specific plans on reviving UNI, he acknowledged the obstacles that lay ahead. “The challenge today is to be relevant in meeting contemporary needs of subscribers”, he said.
NCLT’s insolvency resolution professional, Pooja Bahry, however, also remained optimistic about the deal with The Statesman, saying the committee of creditors took a “conscious” decision “after a detailed analysis” evaluating “feasibility”, “viability”, and “long-term stability”. [Under the Indian Bankruptcy Code, the committee of creditors primarily comprises financial creditors, who have voting rights in deciding the fate of an insolvent company.]
“The Statesman has revived [itself] and has shown the ability to pay”, Bahry told Newslaundry.
UNI’s slow rot
The crisis at UNI had been brewing since the early 2000s. The downward spiral has been attributed to the combination of dwindling subscriptions, internal mismanagement, and failed rescue attempts.
The first major blow came in 2006, when key shareholders began pulling out their subscriptions, shaking UNI’s financial foundation. Soon, the agency struggled to pay salaries, a problem that only worsened over the years.
Unlike its rival PTI, UNI hadn’t made it mandatory for its shareholders to be subscribers, leaving its revenue model quite vulnerable.
Of UNI's paid-up capital, the largest shareholder is the ABP group, which owns 19 percent. Aveek Sarkar, vice-president of the group (and present chairman of PTI) owns 11 percent in his personal capacity. Its other stakeholders include The Statesman – which owns 12 percent, The New Indian Express – which owns eight percent, Hindustan Media with 7.2 percent, Manipal Media Network with six percent, Deccan Herald with six percent, Bennett Coleman and Company Ltd group with 5.3 percent, The Hindu 3.4 percent, and The Indian Express with 1.25 percent.
According to Ravindra Kumar, The Statesman continued its UNI till 2008.
By 2022, UNI’s financial position had become dire. An “extraordinary general meeting” of its board noted that accumulated losses had reached Rs 113.98 crore. The board attributed the losses to a steady revenue decline over the past decade, recounting the “major hit” the agency received in late 2020 when Prasar Bharati, the state broadcaster, stopped its UNI subscription, wiping out lakhs in monthly income.
“Over the last decade or so and with no active participation from its member constituents and relenting on outsiders for their wisdom and faith, UNI has witnessed a huge fall in its revenues whilst the expenses continued to mount,” the board noted.
According to the documents accessed by Newslauandry, the board proposed a Rs 50 crore rights issue to shareholders and another Rs 50 crore as an unsecured loan to keep the agency afloat. Under a rights issue, a company can offer its existing shareholders the opportunity to buy additional shares directly at a discounted price, allowing them to maintain their proportional ownership.
“... The duty vests on its member constituents to provide requisite support and keep the cause for which it was incorporated, alive,” the board had noted.
However, the proposal was reportedly rejected by the stakeholders.
Newslaundry has reached out to Sagar Mukhopadhya, who was a director at UNI at the time. However, we did not receive a response at the time of writing this report.
This was not the first time shareholders blocked a potential revival plan. In 2006, Essel Group’s Subhash Chandra, through his investment firm Mediavest, made the highest bid to acquire a 51 percent stake in UNI for Rs 32 crore. The offer was ultimately foiled after shareholders moved the Company Law Board against the takeover. Over the years, there were other interested buyers but no deal materialised.
Only time can tell if UNI’s fortune can turn around with the new deal.
Update at 7:56 pm on March 21: This story was updated with The Statesman's Ravindra Kumar's response.
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