Struggling for credibility

The Bengali New Year (April 14) saw a regional channel featuring a host of celebrities in tears. From anchors to crew members all were disconsolate. The owner – Sudipta Sen, chairman and managing director of Saradha Group – had announced closure of its media ventures rendering over a 1,000 people jobless.

It led to a chain of other related incidents. The Saradha Group – which allegedly mobilised over Rs 20,000 crore thorough Ponzi schemes – went bust. Protests erupted across the State with people demanding that their money be refunded. And the matter escalated from Saradha to the numerous deposit-taking companies.

To top it all, the Ministry of Corporate Affairs identified 72 such multi-level marketing companies against whom it received complaints of fraud.

In a desperate attempt to salvage their image in the wake of the Saradha scam, other companies in the business are taking to media. The idea is to allay investor fears and assure them that their money is safe. Apart from print advertisements companies have now started airing TV commercials.

At least eight of these companies – Rose Valley, MPS Greenery, Aspen Projects, Vibgyor Gold, Vibgyor Allied Infrastructure, Prayag Group, Jasoda Real Estate and iCore – have come up with advertisements beginning April 16.

Such advertisements have been pouring in on a daily basis in local language dailies for the past one month.

The advertisements claimed that these companies were different from Saradha and while they collected money, they had the ability to repay depositors.

Rose Valley was the first. Its advertisements in national and regional newspapers claimed that it was an “asset-based economically proficient” company.

“We spent around Rs 1.25 crore this year on various print advertisements. The advertisements came up only after the Saradha incident,” Gautam Kundu, chairman, Rose Valley Group told BrandLine .

Incidentally, one of the group outfits of Rose Valley was fined Rs 1 crore by the Securities and Exchange Board of India (SEBI) for its failure to provide details to the regulator. This happened after news of the Saradha scam broke out.

For nearly two weeks the Prayag Group and MPS Greenery have been running TV commercials on a regional channel.

The TVCs, which ran for more than two minutes, focused on allaying investors’ fears while showcasing the projects in which investors’ funds were parked.

MPS Greenery, which has been at war with SEBI over its collective investment schemes, is now fighting a pitched battle with the regulator. “We have spent nearly Rs 15 lakh on various advertisements. Due to the Saradha scam we are facing some problems,” P. N. Manna, Chairman and Managing Director, MPS Greenery, says.

Finally, out in public

According to a Kolkata-based brand consultant, the Saradha money collection scam has, in fact, had one positive impact in the market.

Most of the deposit-taking companies’ owners and head honchos have so far kept a low-profile. Most of them have also shunned public appearances. Shunning media queries, ignoring calls and changing cell numbers frequently have been pretty common to avoid media glare.

But post-Saradha most of them have made public appearances and tried to opt for personal communication to allay investors’ fears.

Sixty-year old Manna’s photo is now splashed across media – be it in print or in the TVCs. Similarly, Basudev Bagchi, chairman of Prayag Group, too, has made appearances in the group’s TVCs.

Similarly, Shibamoy Dutta, Managing Directior, Rose Valley, had a couple of weeks ago participated in a talk show on a regional channel where he had taken questions about the group and its various activities.

In yet another instance, the Chairman and Managing Director of Tower Group (yet another deposit-taking firm), Ramendra Chatterjee, had called a press conference to assure that investors’ funds were safe.

Interestingly, in the wake of the Saradha Group going bust, all money-collection companies have started opening up to media queries. In a situation like this the best way to allay fear and create an image is to open up to media queries, a Kolkata-based communication firm says.

Other Casualties

With the bubble bursting for these companies at least five Bengali films in the post production stage and scheduled for release in May-June this year have been left high and dry.

Actor Arijit Dutta, who is an important member of the Kolkata film fraternity, says that while there might be some problems in the short run, there will be no problems in the long run. “It was a new source of funds that the industry had welcomed and any industry would have done so. But except one or two companies none of the others were serious players,” Dutta adds.

Three films, produced by Brand Value Communications Ltd, a Rose Valley group outfit, have won national awards.

However, in stark contrast, a Bengali film on money-collection companies duping people in the State is all set for release on May 10. Called Kagajer Nouka (Paper Boat), the movie features the story of two freedom fighters – one remaining true to his ideals and another setting up a deposit taking company duping people.

Crisis Management

Sayantan Das Adhikary, Director, Candid Communication, however, is not sure of TVCs or advertorials making the right impact in a crisis of this sort.

According to him, making public appearances and opening up to media queries is the best way to stave off negative perception.

“The problem with TVCs is that they can be doctored by companies and hence reliability is low. On the other hand, a live chat show is the best option. But then again, the person present has to ensure that he has satisfactory answers to uncomfortable questions,” Das Adhikary said.

Capital markets watchdog Securities and Exchange Board of India on its part has been regularly issuing advertisements in the major national and regional dailies drawing investors’ attention to such dubious schemes promising high returns.

The regional office (West Bengal and Sikkim) of Reserve Bank of India has also been conducting awareness camps in collaboration with the Consumer Affairs Ministry to caution people against investing in schemes floated by “fly-by-night” operators.

COMMENT NOW