By Email/Speedpost A.D./Hand Delivery Mzm/Zm//2020 11
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BY EMAIL/SPEEDPOST A.D./HAND DELIVERY MZM/ZM//2020 11 February 2021 To, Broadcast Audience Research Council (“BARC”) Valencia, 4th Floor, Rajkamal Marg, 61, Dr S.S. Rao Road, Parel, Mumbai - 400 012 Email: [email protected],[email protected], [email protected] Re : 1) Material Breach of End User License Agreements (“EULAs”) dated 03.12.2015, 08.12.2017 and 08.12.2020. 2) Internal Investigation Report, i.e. Report of Digital Forensics Services dated 24.07.2020 submitted to BARC by Acquisory Risk Consulting Pvt. Ltd. 3) C.C. NO. 484/PW/2020 (State of Maharashtra v. Vishal Ved Bhandari & Ors) (the “charge-sheet”) pending on the file of the Ld. Addl. Chief Metropolitan Magistrate, 37th Court, Esplanade, Mumbai. Sub : Illegal and fraudulent viewership data manipulation and tampering of Television Rating Points at the Broadcast Audience Research Council. Madam/Sirs, We are concerned for our clients Bennett Coleman & Company Ltd., (“BCCL/Our Clients”) who have instructed us to issue this legal notice to you (“Notice”), on account of the shocking illegal and fraudulent viewership manipulation and tampering of Television Audience Measurement and Television Rating Points (“TRP”) particularly, of our Clients’ channel “Times Now” (“Aggrieved Channel/Channel”) by Broadcast Audience Research Council (“BARC/you”) and under our Clients’ instructions, we hereby notify you as under: 1. Our Clients are a Company incorporated under the provisions of the Indian Companies Act, 1956 (“Companies Act”) having its registered office at The Times of India Building, Dr. Dadabhai Naoroji Road, Fort, Mumbai – 400001 and the Television Division’s Office at Trade House, Kamala Mill Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013. BCCL is a 178 years old, reputed media conglomerate, operating in almost every business vertical Page 1 of 14 of media such as Print (newspapers and magazines), Television, Radio, Music, Films, Internet & Digital, Events, Outdoor Publicity etc. and is popularly known as ‘Times Group” in Media and Entertainment sector and the corporate world. Times Network, a television division of our Clients’, broadcasts various news and non-news channels, including ‘Times Now’, which is an English Language “News” genre channel. 2. Our Clients have been telecasting various channels, including the said Times Now in India for over 15 years and the same are highly popular amongst its viewers and advertisers due to good programming content, packaging and provision of timely news updates with a very wide reach throughout the country with honest and fearless reporting. 3. Our Clients state that BARC is incorporated u/s 25 of Companies Act as a television viewership rating agency which is promoted by the Indian Broadcasting Foundation (“IBF”), the Indian Society of Advertisers (“ISA”) and the Advertising Agencies Association of India (“AAAI”), and is set up with the specific purpose of designing, commissioning, supervising and owning India’s Television Audience Measurement/Television Ratings System. BARC operates under the license granted by Ministry of Information and Broadcasting (“MIB”) and is the only rating agency in India at present and hence, enjoys a complete monopoly. Our Clients state that you are the sole provider of television rating services in India on a commercial basis and are required to function under the Policy Guidelines for Television Rating Agencies dated 16.01.2014 of the MIB (the “MIB Guidelines”). You are required to abide by all applicable regulations/orders/guidelines/directions etc. issued by the MIB and the Telecom Regulatory Authority of India (“TRAI”). BARC has been entrusted with an important commercial activity of significant public interest. 4. Our Clients state that this Notice has been addressed to BARC and through BARC, its various officials and members of the management and/Board of BARC, who are/were in control of and responsible for its day-to-day affairs and who were/are directly and indirectly involved in fraudulent and dishonest activities in relation to the conduct, commission and operation of BARC’s business, inter alia, concerning the captioned EULAs and the deliverables/licensed data (TRP and Television Audience Measurement data) therein. Our Clients emphasize that the said fraudulent and dishonest activities have been carried out by BARC and its officials with the intention of causing financial and reputational loss to our Clients, thereby ensuing deliberate illegal enrichment to BARC and their co-conspirators along with other benefiting parties. 5. At the onset, our Clients state that the subject matter of this Notice, not only concerns corrupt manipulations and rigging of TRP/Viewership Data in lieu of receipt of illegal gratification from particular Channel(s), but also reveals a larger, deep rooted conspiracy to fraudulently and dishonestly inflate the valuation and advertisement revenues of the beneficiary Page 2 of 14 channel(s)/subscriber(s). BARC, in connivance with the beneficiary channel(s)/subscriber(s) has perpetrated a systematic fraud to deceive and dishonestly induce our Clients, advertisers, viewers, stakeholders and investors into believing that the beneficiary channel is the most watched English News TV channel in the country, whereas in reality as per genuine data available with BARC, the most watched English News TV channel was that of our Clients i.e. Times Now. The beneficiary channel was fraudulently and maliciously projected and positioned as number one, in order to artificially increase/inflate its advertisement revenues, the share value and the overall valuation of the broadcaster company. This systematic fraud was perpetrated to cause unjust enrichment to the errant beneficiary channel, BARC and its officials and wrongful losses to our Clients, other investors, stakeholders and the public at large. BARC and its corrupt officials ran a nefarious scheme to fraudulently and artificially inflate the beneficiary channel’s valuation and revenue. All that the beneficiary had to do was to launch a channel first, and thereafter, simply enter into an unholy arrangement with top BARC officials who would not only fraudulently increase its viewership data, but in the process also “take care” of genuine competition for the beneficiary to inflate its valuation so as to show unprecedented growth in its business and reap consequent benefits. 6. Our Clients further state that even after the said fraudulent and dishonest activities were discovered and brought to your attention, via the captioned Forensic Audit Report dated 24.07.2020, whereby your directors and officials became aware and had knowledge of the fraudulent acts of TRP manipulation and viewership malpractices being carried out by BARC’s Key Managerial Personnel (“KMP”), senior officials, vendors, contractors and associates - intentionally, no disciplinary action was instituted against the said fraudulent acts nor were these malpractices and fraudulent activities reported to any investigating authority by BARC. This conduct makes our Clients verily believe that the entire Board of Directors of BARC (“Board”) and KMP of BARC being in control of the affairs of BARC, are somehow, involved in commission of the fraudulent activities, thereby making the entire Board including the KMP liable for appropriate prosecution under various provisions of the laws of the land. 7. Our Clients strongly bring to your notice that our Clients reserve their rights to proceed legally against any directors, officials, associates, vendors, service providers or contractors of BARC, or any other co-conspirators or perpetrators in these illegal and prejudicial acts, as and when so advised to secure our Clients’ interests which have been gravely prejudiced and imperiled by your commission of unlawful acts of omission and commission. 8. Our Clients state that given BARC’s unique role as an organization functioning under the aegis of the MIB and TRAI, it is of paramount importance that BARC remains absolutely neutral, unbiased and impartial. However, entailed herein below, our Clients describe and set out severe dereliction and deviation, in Page 3 of 14 responsibility and neutrality by BARC and its KMP and other officials which not only has caused severe wrongful loss of repute, standing and following but has also culminated in direct business losses to our Clients, more particularly, to the Aggrieved Channel, quantifiable and squarely associable to BARC’s illegal conduct of manipulation of TRPs and related data. 9. Our Clients avow that basis the representation given by BARC and its directors/KMP regarding it mechanisms and methodology being transparent, free of influence and malpractice, above reproach and that accurate and reliable TRP data will be provided to all subscribers, our Clients subscribed to the data licensed by BARC vide EULAs dated 03.12.2015, 08.12.2017 and 08.12.2020 for the purpose of: (i) internal research and analysis of the Licensed Data and Services; and (ii) marketing, promotion and as a base for sale of advertisements as well as a reference point in its documents and agreements etc. with any party or person or any other part of the broadcast and other business of our Clients. Pursuant to the said EULAs, our Clients have paid license fee to the tune of INR. 21.83 crores as on December 2020. 10. Our Clients state that as per Annexure ‘A’ to the EULAs i.e. the Code of Conduct Part II, (Code of Conduct for Redressing Viewership Malpractices), under the heading ‘objective’ – BARC has committed to provide a Rating System that is fair, transparent and free of any influences and malpractices and further provided the mechanism to prohibit, discourage, prevent and control malpractices related to and resulting in tampering with the Ratings, including creation of Vigilance Teams, Disciplinary Council, procedure to be followed and nature of actions to be initiated against an erring subscriber. However, our Clients state the same has collapsed altogether creating a vast cloud of turmoil and cascading remunerative losses solely attributable to the illegal and fraudulent activities caused by the conspirators and perpetrators amongst the corrupt officials and Board of BARC.