Niira Radia’s Nightmare

For India’s most successful public image manager to suffer an image crisis is an irony that requires us to think beyond the obvious.

Under normal circumstances, it is Niira Radia and her public relations (PR) firm Vaishnavi Communications that do all the image management. But with Radia herself in the eye of a storm of conspiracies over the malafide awarding of telecom licences by the Centre, it’s her clients who are shielding her image for a change. And her clientele includes India’s two biggest private enterprises—the Tata Group and Reliance Industries.

Despite a ringing endorsement of her credentials from the Tata Group, often hailed as India’s most ethical business house, Radia is finding it hard to get positive PR for herself. How did she find herself in this muddle? Her nightmare began when a Delhi daily published details of an ongoing investigation into her alleged collusion with Telecom Minister Andimuthu Raja in the sale of precious second generation (2G) telecom licences and airwave spectrum at throwaway prices to a few chosen companies. The report claimed that the Central Bureau of Investigation (CBI), Income Tax Department and Central Board of Direct Taxes had ‘clinching’ evidence to nab the PR lobbyist, based on tapped phone conversations between her and the telecom minister, a member of Tamil Nadu’s ruling party Dravida Munnetra Kazagham (DMK). While the supposed ‘transcripts’ of these phone calls have been doing the rounds in Delhi for three months now, the revelations by the daily last week found resonance in Parliament.

To call the second round of 2G telecom licence awards in 2007-08 ‘non-transparent’ would be an understatement (see ‘Out of Thin Air’). To arbitrarily award licences and airwave spectrum at the same prices as ten years ago, before India became the world’s hottest telecom market, defies both sense and fairness.

Radia was named in a November 2009 letter on a ‘criminal conspiracy’ between public servants and private interests related to the above awards, written by Vineet Agarwal, then DIG with CBI’s anti-corruption branch, to the director general of Income Tax investigations. The letter sought transcripts of her phone calls from the tax sleuths, who in turn seem to have blown a whistle on her ‘boasts’ about having secured licences and spectrum for some operators. Of the nine new 2G licencees, four—Aircel, Swan Telecom, Datacom and Unitech—are said to be Radia’s clients, though Vaishnavi admits to doing business with only one of them. “Of the companies mentioned, yes, Unitech is our client,” says a senior executive of the PR agency, “but we handle the public relations account only for its real estate business, and Tata Teleservices is the only client who we provide advisory services.”

Documents of the tax probe also allege that Radia advised her client Unitech to duck taxation by bringing in money realised from selling its telecom business stake to Norway’s Telenor in tranches. Niira Radia declined to speak on the issue, and did not answer an emailed questionnaire, but sources close to her contend that while her phone calls may have been recorded, their contents have been twisted—“editorialised”—to suit conjectures that aim at maligning her. But apart from the legal notice filed against the daily that published the report, Vaishnavi’s efforts at defending its reputation have been rather muted. Usually, if the same fate had befallen one of its clients, the PR agency would have gone into overdrive to dispel all such ‘malicious charges’. “What is the point, when our clarifications most likely will be buried in the inside pages or get a cursory mention at the end of a story?” asks the senior Vaishnavi executive, with a seeming shrug, “Most importantly, we are pursuing a watertight case against the publication in question, and all our clients are standing firmly behind us.”

That such blue chip clients should back Niira Radia so strongly speaks for the stature she has attained as a PR professional. Her success story is something of a fable. Born to Kashmiri parents in East Africa, Radia is a British citizen with a ‘person of Indian origin’ status. The 49-year-old, who speaks with an accent that doesn’t betray her passport, is extremely well networked within the bureaucracy and political circles. As an aviation consultant, she has advised companies such as Airbus, Singapore Airlines, KLM and Air Sahara. Her big business break arrived when she was appointed advisor to the Tata-Singapore Airlines consortium that was looking to buy a stake in the national carrier Air India, back in the late 1990s when it was under consideration for disinvestment. Although it was an aborted attempt, sources say an impressed Ratan Tata wanted Radia to become a communications consultant for the Tata Group, which he was in the process of restructuring in a big way. In an unprecedented deal in 2001, the Tata Group entrusted the PR accounts of all its 80-odd companies to Radia’s newly formed agency Vaishnavi Communications.

In less than a decade, Vaishnavi has emerged as the biggest PR player in an industry whose influence within the media and policy making circles is disproportionate to its commercial size. What earned her Ratan Tata’s redoubled confidence, say sources, was her deft handling of a controversy around Tata Finance’s accounting irregularities in 2001-02, an issue that was sorted out to everyone’s satisfaction—all-willing—before it could blow up into something seriously traumatic.

By 2005, as she ascended the VIP curve as a mega-success in her own right, Radia’s ambitions had soared higher still. With low-cost flying the hottest business idea in town, she planned a no-frill airline of her own called Magic Air. But she hadn’t yet made quite so big an impression on Delhi’s power structure. Her plans were grounded by a failure to get the requisite regulatory approvals. “Radia has few equals in understanding the aviation business in India,” says the former CEO of an Indian airline Radia was once an advisor to, “If Magic Air had taken off, I have no doubt that it would have been amongst the most successful even in a bleeding market.”

Radia commands respect from most who’ve worked closely with her, with past and current employees vouching for her professionalism. When she managed to bag the PR account of India’s largest business, Reliance Industries, it was a coup that startled the entire world of business, not just the PR industry. After all, she already had the Tata Group as a client, and what stumped everyone was that neither of the two biggest business groups in India saw a conflict-of-interest in this arrangement. “The Reliance-Tata rivalry is a thing of the past,” says a source close to Radia, “Moreover, Reliance had seen the kind of work Vaishnavi had done for the Tatas right from the time that Ratan Tata was everyone’s punching bag.”

With over 300 people on the rolls of the agency, Vaishnavi’s billings are estimated at some Rs 150 crore. To exclusively service the Reliance account, Radia started a new PR subsidiary, Neucom. The Radia camp suggests that it is this unique success that her rivals cannot get over, hinting that the bitter split between the two Ambani brothers could be a factor in the lady’s troubles. Even the 2G spectrum scam, these sources whisper, is mostly about the conflicting interests of the warring brothers.

Vaishnavi’s other divisions include Vitcom, an agency that handles media and entertainment clients such as Imagine TV, and Noesis, a think-tank-cum-consultancy that has in its ranks retired senior bureaucrats such as Pradip Baijal, former Trai chairman; and CM Vasudev, former economic affairs secretary at the Ministry of Finance.

But the current Raja-Radia connect raises several questions about lobbyists in India, a country that has sought to use disintermediation as a corruption buster ever since the Bofors scandal. As Home Minister P Chidambaram said in Parliament last week, India does not allow lobbyists and middlemen, though they are legal in countries like the US, where former secretaries of state and defence often represent vested interests as registered lobbyists.

The Radia camp says she was authorised by her client, Tata Teleservices, to liaise with policymakers in favour of a ‘level playing field’ by ridding the sector of ‘distortions’ in policy that had preloaded the dice in favour of vested interests. “Tata Teleservices has been disadvantaged from the beginning,” says a Radia aide, “For instance, even now, although the company has the licence, it doesn’t have the spectrum in Delhi. Without this, the whole process of rolling out services gets delayed. Radia is mandated by the company to help ease out distortions. When people say we are lobbyists, it is really insulting to the kind of work we do. Often the bureaucracy is not attuned to ground realities. What is wrong in giving them an honest and informed perspective?” It’s a clever line of defence. But intermediation in the imagery game, unlike finance, will always be suspect.

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