ZEE TELEFILMS' VIJAY JINDAL: ON HIS WAY OUT?

Speculation was rife throughout last week that Zee Telefilms (ZTL) chairman Subhash Chandra would drop Zee Network CEO & ZTL managing director Vijay Jindal. The company consistently issued denials on the issue. Finally, this evening it became clear that Jindal's days were numbered at ZTL, despite the fact that he had a five year contract with the company. Chandra sent a personally signed press release issued on 28 June after 19:00 hrs Indian Standard Time in which he said that he was recognising Jindal's much acclaimed performance as CEO of Zee Network and "promoting him as co-promoter of the new media business through sweat equity and stock options."

He added that Jindal would continue to function as managing director of Zee Telefilms and would be responsible for selecting and inducting the new incumbents and probable CEOs for existing media business of the Zee Network in its different domains. His job as managing director would be to ensure continuity and smooth transition of the management over the next six months.

What Chandra did not specify in the press release is whether Jindal had ceased being CEO of the Zee Network, but it appears as though he has.

The press release appears to be an attempt to help Jindal save some face as the rumour is that the two have fallen out. This was very much apparent at an investor's conference recently where Chandra ticked off the latter like a schoolboy and had him pleading for extra time for a presentation. The duo also, allegedly, had a row last week on the issue of control. Finally, Chandra had placed an ad in The Economist and The Economic Times seeking a new CEO designate six months ago which had got the rumour mongers abuzz. A committee consisting of senior industry professionals was also set up in order to help with the recruitment. But nothing, it seems, came of it.

What is to be seen is whether Jindal will take up Chandra's offer of becoming a co-promoter in Zee Network's new media business, which includes zeenet.com - Internet delivery via cable TV, the development of portals and, in future, possibly, the direct to operator (DTO) digital bouquet. In all likelihood it is going to be the former business opportunity that Jindal would prefer.

Some company insiders believe this is a very positive move on Chandra's part and should not be viewed as a demotion for Jindal. "It is a reflection of the respect he has for Jindal's capabilities that he has entrusted in him the joint responsibility of steering Zee TV into new media options like the Internet and convergence, which he doesn't understand too much about. It is probably a major development in Indian corporate history as very few promoters are open to giving their executives a promoter's equity stake in a venture. As far as Chandra is concerned, at least he is responding to media innovations unlike Murdoch who has been totally dismissive about the Internet. It is his son James who has been chipping away at his father's resistance," says a senior executive at Zee TV.

Meanwhile, indications are that media maven Deepak Shourie (who successfully launched the weekly magazine Outlook) is likely to join the Zee Network as its CEO with his initial focus being on Zee News what with the elections on the anvil