Proximity and risk to investors!

Last week, when a photograph of smiling Indian Prime Minister Narendra Modi appeared on full-page advertisements of Reliance Jio in leading national dailies of India it led to a storm on social networking sites and questions were raised about the propriety of linking a constitutional figure with a commercial venture. It led to storm, however no clarification was issued by the Prime Minister’s office as Prime Minister was away attending G-20 Summit in Hangzhou. However, his recorded interviews were being run on TV channels owned by Reliance lauding the efforts on his government over two and a half years.

Captivatingly Reliance Jio is a venture by Mukesh Ambani group. The group has been under scanner for violating the profit sharing contract with the government for exploration of hydrocarbons in the Krishna Godavari (KG) basin. Shrewd Reliance, presented the brandJio as a dedication to the digital India dream of the Prime Minister thus justifying his picture and giving an impression of being fair to a large section of common Indians who are not able to draw much inference from a written message but from a pictorial one.

The advertisement made reference to the dream of Prime Minister and even cited excerpts of his speech to the same. The advertisement raised questions on the connection between Reliance and Prime Minister Narendra Modi. Indians were left wondering how Prime Minister Narendra Modi could be the brand ambassador of Reliance Jio.

Lawyers were called by media at various debates and an obvious reference was made to the Emblems and Names (Prevention of Improper Use) Act, 1950 that was enacted to prevent the improper use of certain emblems and names for professional and commercial purposes.Clause 3 of the Act states: “Notwithstanding anything contained in any law for the time being in force, no person shall, except in such cases and under such conditions as may be prescribed by the Central Government use, or continue to use, for the purpose of any trade, business, calling or profession, or in the title of any patent, or in any trade mark or design, any name or emblem specified in the Schedule… without the previous permission of the Central Government…” The Schedule includes the “name or pictorial representation” of the Prime Minister as part of it.

The conclusion to the act referred was not difficult even for the common Indian to understand. It was simple, that you cannot use or reproduce the image in any shape or form in any advertisement even for Government of India schemes, unless you have the mandatory written permission, and the matter/contents of the purported advertisement has been cleared for publication or telecast by the Prime Minister’s Office and the Director General, Press Information Bureau.If the image does not have the mandatory permission, the government of India can act against the company for misusing the Prime Minister’s image.

Obtaining all those permissions must have been an easy task for the Reliance group considering the visible proximity. However certain questions remained to be answered. Can Prime Minister of India formally endorse a private company, especially when there is a stiff competition where a slight change in rules can change the fortunes of a company?

What message does it send to regulators and officials, when the Prime Minister apparently endorses a new player who plans to play spoil the game for the established players? And hasn’t Prime Minister stirred a hornets’ nest by agreeing to such an endorsement?

Prime Minister Narendra Modi is known for his partial tilt towards certain industrialists being extremely close to the Ambani and Adani business families. Soon after assuming office he had flown to Mumbai and inaugurated the H N Reliance foundation hospital.  Modi had also digitally inaugurated the Reliance Foundation Youth Sports Initiative this year.

Media in India has earlier highlighted that billionaire industrialist Gautam Adani was Modi’s constant travel companion on his trips abroad often staying on the same floor as him. The Gujarati businessman and head of the Rs 56,000 crore infrastructure groups was at the Prime Minister’s side constantly. Modi was also present at the same table at the G-20 summit in Australia when State Bank of India chairperson, Arundhati Bhattacharya inked an agreement for a Rs 6,200 crore loan for Adani’s coal project – which has since then been embroiled in huge controversy. Adani was a fixture when Modi went to USA, France, Australia, Brazil and Japan. This is of course simply following the pattern established when Modi was Gujarat Chief Minister and Adani used to accompany him on his trips. Modi also used Adani’s aircrafts in his whirlwind campaign for the general elections.

By openly siding with two business houses in India, Prime Minister Modi has given a signal to companies looking to invest in India. All is not fair, few have been preferred and a few may be. Enter a competitive market at your own risk.