Arun Sudhaman 29 Oct 2011 // 11:00PM GMT
MUMBAI--Tata Group has handed its lucrative public relations account to a new alliance formed by Rediffusion and Edelman after Niira Radia’s shock decision to shut her firm Vaishnavi Corporate Communications, often considered India's largest PR firm.
Vaishnavi had held the Tata account since its founding in 2001 but the relationship was placed under intense scrutiny when top corporate lobbyist Radia became embroiled in the controversy surrounding the bidding for India’s 2G telecoms licences. Transcripts of Radia’s phone conversations appeared in the media, and she was eventually questioned by the country’s Enforcement Directorate.
Radia’s decision also means the end of Vaishnavi’s relationship with Reliance Industries, another key account. In a statement to her firm's staff, obtained by the Holmes Report, Radia confirms that "all companies in the Group will be stopping operations with immediate effect."
Thanks in large part to its Tata and Reliance business, Vaishnavi is often considered India’s biggest PR firm, with - at its peak - more than 300 staffers working across 11 owned offices in the country. The Tata business alone has been estimated at around Rs 25 crores (US$5 million).
Around 30 of its staff will now transfer to Reliance to form its internal communications team.
“For many years, a few with vested interests have been trying to cause harm to Vaishnavi and me personally," says Radia in the memo. "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. If that makes them better human beings then I am happy to have brought in a positive change in them.”
Radia adds that a "transition process" will attempt to find opportunities for the remaining staffers. "Most of you are on the right side of 30s and 40s at and still have many more things to achieve. I realise a lot of you have been staying back at Vaishnavi inspite of some very tempting offers due to a sense of belonging, responsibility and obligation. I will be eternally indebted for the love and dedication you have shown over the years but the time has come to let all of you fly and attain newer heights."
A separate statement also contained comment from Tata Sons chairman N Tata and a spokesman from Reliance Industries, which has worked with Vaishnavi since 2008.
“We regret the decision of Ms. Niira Radia to discontinue her association with the business of communications consultancy and not renew any of her client mandates,” said the Reliance spokesperson. “Radia leaves behind a very capable team and an indelible mark on the communications consultancy business.”
Tata said that Vaishnaivi’s “engagement with [Tata Group] had been ethical and satisfactory.”
On its website, Tata Group revealed that it has “appointed Rediffusion, led by Arun Nanda, to manage public relations and public affairs for the Tata group of companies from November 1, 2011.”
It has since emerged that a new alliance between Rediffusion and Edelman will service the business. "The complexity of the Indian market favours an integrated communications approach that needs to seamlessly combine multiple marketing disciplines,” said Nanda, chairman and MD of Rediffusion-Y&R. “Our partnership with Edelman allows us to partner one of the world’s finest PR companies and offer our clients the best in class thinking and capability in this area."
Tata Group is one of India’s dominant business houses, and regularly ranked among the most reputable companies in the world.