News agency UNI in legal embroglio, ex-employees approach NCLT for fresh resolution process
New Delhi, Jan 17 (BVI) Months after The Statesman Ltd took control of United News of India (UNI) through an Insolvency and Bankruptcy Code (IBC) Process, the news agency is again embroiled in a legal battle, with around 120 of its dissatisfied former employees petitioning the National Company Law Tribunal (NCLT) for a fresh resolution process that would do justice to them.
The employees, who got only a small portion of their salary dues, have alleged that the IBC process was “maneuvered” by The Statesman Ltd, which held “a substantial shareholding in the UNI Trust” that owned the company before initiation of the insolvency process in 2022.
The NCLT has taken cognisance of the petition and issued notice to the Resolution Professional who conducted the IBC proceedings of UNI.
UNI, a credible and reputed multilingual news agency, was founded in 1959 as a Trust whose shareholders included owners of major newspapers and publications, including The Statesman Ltd.
Around 15 years back, UNI, which used to be a frontline news agency, started to incur losses, which kept compounding, leading to a dire financial crisis and the resultant accumulation of huge dues of the employees.
In 2022, the union of UNI employees approached the NCLT under the Insolvency and Bankruptcy Code (IBC) Act for recovery of their their dues which were to the tune of Rs 104.37crore, as per their petition.
After around two years of IBC process, the NCLT, in February last year, approved the Resolution Plan submitted by The Statesman Ltd, publisher of The Statesman newspaper, to acquire UNI for Rs 75 crore – Rs 72 crore to settle debts and Rs 3 crore as fresh capital to revive the news agency.
Intriguingly, the successful Resolution applicant – The Statesman Ltd – which acquired 100% stakes in UNI following the NCLT order, has itself been facing severe financial problems for several years.
This made the employees wonder how a company, itself in financial distress, could save and revive UNI.
The NCLT judgment left the employees and former employees, including hundreds of journalists, unhappy and dissatisfied as they got only a paltry portion of their dues.
Therefore, these employees have knocked at the doors of the NCLT again, seeking a review of its February 12, 2024 judgment approving the Resolution Plan of The Statesman.
The former employees have said that “the Resolution Process has not ensured payment of their full dues and other legitimate entitlements, because of which they are faced with substantial financial hardship as a direct consequence of the above actions. The situation is not only violative of their rights as operational creditors but also prejudicial to the interests of justice and natural equity.”
These petitioners have also submitted that “the valuation of the physical assets under possession of United News of India (UNI) has been much less than the actual value, and is thus unfair.”
It may be pointed out here that UNI, because of it being a Trust originally, has been given a large plot of prime land measuring around 5,000 square meters on Rafi Marg, just about 100 meters from Parliament Complext, in New Delhi on lease by the government.
So, by acquiring UNI, The Statesman Ltd, a private company, has come to occupy this prime piece of land, which is said to be valued at hundreds of crores of rupees.
The petition filed in NCLT by the former employees of UNI says that a “strategic maneuver was orchestrated through deliberate actions by The Statesman Ltd, which held a substantial shareholding in the UNI Trust, in a manner that appears to be both planned and collusive.”
The petition highlights that The Statesman Ltd and its Director Ravindra Kumar, who officially represented The Statesman Ltd in the UNI Trust, held more than 10% stakes as shareholders separately in UNI Trust when the news agency dipped into financial crisis, which led to the insolvency proceedings.
Significantly, the same stakeholder — The Statesman Ltd – became a Resolution applicant when the insolvency proceedings were launched.
“Such actions highlight the complex interplay of corporate interests and strategic manipulations aimed at restructuring or gaining control over the assets of UNI, raising concerns about the integrity of the process and the motives behind these maneuvers,” says the petition filed by the former employees of UNI.
In their petition, they have stated the following:
i.”The Statesman Ltd, which is one of the founders and major shareholders of UNI, by collusion and in a systematic manner, engineered circumstances, through a planned and deliberate conspiracy, leading to insolvency.
- “The Statesman Ltd., in its capacity as a significant shareholder of United News of India (UNI), thwarted the efforts of the previous Board of Directors to infuse funds amounting to Rs 50 crore through a Rights Issue. In this conspiracy, it enlisted the support of a few other shareholders. As it turns out now, The Statesman Ltd. Wanted UNI to undergo the IBC process so that other shareholders could be removed from the scene, allowing The Statesman Ltd. to usurp the reputed company, particularly its physical assets worth hundreds of crores of rupees, all at a very low price of Rs 72 crore.
iii. “On critical occasions when other shareholders attempted to rescue UNI by proposing a fund infusion of ₹50 crores via rights issues, Mr. Ravindra Kumar and The Statesman, contrary to the interests of UNI, rejected all such suggestions and ensured that the required funds and financial support were denied.
- “The Applicants learnt that members who supported such capital-raising resolutions were deliberately sidelined and disallowed from mobilizing any fresh funds.
“It is very much obvious that these actions by The Statesman Ltd, through its Director and Representative Mr. Ravindra Kumar, were a part of a larger plan to render UNI sick and then, through the IBC route, affect a hostile takeover and completely change its essence and objectives, essentially hijacking the valuable properties and legacy of UNI.”
Their prayers include:
“Order a fresh Resolution Process that would address the flaws and lacunae in the Resolution Plan approved by Hon’ble NCLT through its order on 12th February, 2025, and be just and fair to the employees as well as the company UNI.”
“The fresh Resolution Plan should debar The Statesman Ltd since it is a founder shareholder of UNI and there is conflict of interest involved.”
“Ensure that appropriate valuation is done of the physical assets under possession of UNI.” (BVI)
