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Suveen K. Sinha | Print Edition: Nov 27, 2011

In the normal course, no public relations agency would advise you to make a big announcement on the day India hosts its first Formula One race. The din of 95,000 people in 40,000 cars making their way to the Buddh International Circuit would drown out everything else. But this was hardly the normal course. Vaishnavi Corporate Communications, which had two of the most coveted clients in Tata Group and Reliance Industries, was announcing that it was shutting shop - lock, stock, NeUcom and Noesis. This was as good - or as bad - a day as any. More good than bad, since it wouldn't hurt if the announcement went unnoticed.

It was not. In these times of a scandal a week, Niira Radia's face on television that Sunday afternoon may have looked only slightly familiar to some, but the echo of the socalled Radia tapes is still too strong to be lost even in the roar of two dozen 700-hp engines. It was news all right. PR has become big business, and Vaishnavi was the big fish in the lobbying pond. It was also the most unique. "Unprecedented concept... unprecedented client," says Group CEO Vishal Mehta, a trusted aide to Radia, before pausing to add: "Unprecedented crises."

Niira Radia, Corporate Lobbyist
...Till the recent past, I would fi ght back, survive and probably react. However, today, I want to give them their victory and let them savour it: Niira Radia
The first two came about when Ratan Tata, head of the eponymous group, and Radia decided to work together. The two had got to know each other in the 1990s, when the country's largest conglomerate was fighting to put its airline, a venture with Singapore International Airlines, or SIA, in the air. Radia, whose maiden name was Sharma, had moved base to India with her three young sons after her divorce from London-based financier Janak Radia, and was advising SIA. As Tata said ad nauseam in the aftermath of the tapes, the group, whose external communication was managed mostly by internal teams, saw a campaign against it by a coalition of rival companies and journalists.

2G scam: Trouble in store for Radia

It had been at the receiving end of a controversy involving bribes to militants in Assam and had to sacrifice the airline at the altar of government policy, which would not - still does not - allow a foreign airline to hold equity in a domestic carrier.

Radia made two attempts of her own at starting an airline - Crown Express and Magic Air - but failed at both due to her British citizenship. Eventually, she started Vaishnavi on November 1, 2001, out of an offwhite building in New Delhi's South Extension. Compared with the shiny new Mango outlet next door, the office was modest - Radia's shiny SUV parked in the porch its only shot at upmarket status. But nothing would take away from the lustre of its clients list. The list began with Indian Hotels, the Tata Group company which runs the Taj chain of hotels. When it signed an agreement with the Department of Culture for preservation of the Taj Mahal, Vaishnavi was roped in to foster the brand association.

A scene of protest in Singur, West Bengal
A scene of protest in Singur, West Bengal
Soon, it was serving 14 companies of the group, and eventually 90. Despite the 'bulk' deal, there was no discount. Each Tata company signed annual contracts with Vaishnavi, with big ones like Tata Teleservices paying Rs 45 lakh a month. In comparison, a multinational telecom giant is known to pay about a third of that to its PR firm.

"The billings that Vaishnavi declared were nowhere close to industry standard; you do not make that kind of money in PR," says the head of a rival firm who, like many others speaking on the subject, does not want to be named. The companies that required more interface with policy makers, the media and public, may have paid more. Tata Steel, which fought a prolonged battle to acquire Corus in 2007, and Tata Motors, which had a bruising time in its failed attempt to set up a factory in Singur, West Bengal, readily come to mind.

These were annual contracts, but renewed every year without any competitive bids being called. Later on, non-Tata clients came: ITC Foods, Hindustan Construction Company, Punj Lloyd, Ascendas, Haldia Petrochemicals, JK Tyre, the Confederation of Indian Industry, and Bennett, Coleman & Co. And then came the big one, Reliance Industries, for which a new subsidiary, NeUcom Consulting, was set up to serve just the one client. Alongside, Noesis Strategic Consulting was set up with Pradip Baijal, recently retired as the Chairman of the Telecom Regulatory Authority of India, as partner to provide business advisory services.

But none of the other clients compared with the Tatas. The group's relationship with Vaishnavi grew ever closer, so much so that in many cases the PR firm took the shape of the client. Its professionals not only organised interactions with Tata executives, they also spoke for the Tata companies.

So, if you went to Singur when it was burning in farmers' protests against the Tata factory, you met Vaishnavi's personnel on the ground. "For 15 days, we lived on khichri for breakfast, lunch and dinner," recalls a senior Vaishnavi executive. Living on spartan khichri, a porridge of rice and lentils, is meant to show the extent to which Vaishnavi was willing to forgo the worldly pleasures in the service of the client.

The same dedication and proximity eventually undid Vaishnavi as the phone-tapping tapes showed Radia going beyond the purported brief of a "communications consultant" to try and influence a ministerial appointment.

Even as Tata defended Radia, a small but influential group of his executives started informal discussions with outside parties to assess the damage caused to the Tata brand and to the image of Ratan Tata, and figure out the way ahead in managing media relations. Vaishnavi and its people knew nothing about this exercise.

mosimageWhen the end came on October 30, it was short and swift, though "shock" is the word some junior Vaishnavi employees use. Most of them came to know about it from Radia's internal email circulated the same day, in which she invoked Gautama Buddha's philosophy of renunciation. "The last year has been a great experience and one could have continued living in the same manner, always looking behind our back (sic), second guessing when is the next attack coming. But that is not a life I want to lead! ...Till the recent past, I would fight back, survive and probably react. However, today, I want to give them their victory and let them savour it," the email said.

Even some of her senior executives were not prepared for this, but recovered quickly. The recovery was aided by the fact that 30 of them, including CEO Mehta, are joining Reliance Industries. There is a team led by NeUcom head Manoj Warrier to help everyone find jobs. But it is not easy to find 110 open positions for "client servicing professionals" overnight. Some junior staff say they have been left to fend for themselves.

Tata has not taken any, except one person who joined the group a month before closure. Instead, it has chosen Rediffusion, led by Arun Nanda, to handle its public relations. Rediff, in turn, has formed an alliance with Edelman India, passing over the PR firms owned by WPP, which owns 26.7 per cent of its equity. "I do not see any negative impact of the Radia tapes on the Indian public relations industry," says Robert Holdhiem, who heads India operations for Edelman.

Amid all this, the shadow of the 2G case, whose hearings resume on November 11, looms large. Radia has not been arrested, nor charged. She is merely Witness No. 44 for the CBI, which is relying on 124 others to get its convictions. In that sense, the Radia tapes have had little material impact on the case. Will Vaishnavi's closure have any?

Additional reporting by Kushan Mitra and Suman Layak

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