Niira Radia, the high-profile owner and promoter of the over Rs 100 crore Vaishnavi Group, has decided to shut shop. The group handled the public relations functions of two of India’s biggest corporate entities, the Tata Group and Reliance Industries (RIL), and offered consultancy services to various clients.
In a statement on Sunday, Radia said she had decided against renewing any client mandates and to exit the business of communication consultancy “to give precedence to personal priorities of family and health”. “It is a painful decision, taken after much consideration and consultations,” she said.
The decision comes months after Radia made headlines regarding her alleged links with some protagonists in the 2G telecom spectrum scandal. The controversy deepened when leaked tapes of her alleged conversations appeared in the media. Although there was no charge against her, she was named as a witness by the Central Bureau of Investigation. The Tata Group has appointed Rediffusion as its PR agency. However, it is not clear as to how many companies it would handle.
Most of the 110 employees handling clients are to be absorbed by the Tata Group and RIL as well as other clients. Including support staff, the agency had a little more than 300 employees. According to sources, about 40 have been absorbed in RIL. Some of the top managers have joined RIL’s corporate communications department, handled by the agency earlier. Radia, group sources said, had set up a team to make sure the employees got new jobs.
Reacting to Radia’s decision, Tata Group chairman Ratan Tata said, “Radia has built Vaishnavi from scratch into the company it is today, often subordinating her personal and family interests in favour of her clients’ priorities.”
Vaishnavi had the PR mandate of the Tata Group since 2001, during which it contributed significantly to the building of the Tata brand, he said. Vaishnavi’s engagement with the group had been ethical and satisfactory, he added.
It was Tata who had brought in Radia, who represented Singapore Airlines in an aborted tie-up with the group when they first met, with a request to handle corporate communications for the group.
Radia also set up a consulting company Noesis in 2007, for which she roped in well-known names such as Pradeep Baijal, former Trai chairman, as partners to run the business. The firm assisted regulators in West Asia, Africa and East Asia to formuate telecom regulation. She also set up Neucom Consulting, which handled Reliance Industries and had the PR mandate on the gas battle between the brothers Mukesh and Anil Ambani.
A Reliance Industries spokesman said the company regretted Radia’s decision not to renew any of her client mandates. “We have enjoyed a professional and fulfilling relationship with Radia and her team over the last three years.”
“Radia’s commitment has been very impressive and she has always led her team in a manner that tactical developments do not lead to a de-focus on the strategic issues. We do appreciate and respect her wishes for a compelling need to focus on her family and personal issues," he said.
In her statement, Radia thanked Vaishnavi’s key clients for their understanding and mutual agreement to bring closure to the decision. “I am also grateful to them for their support in taking my decision to its logical conclusion, offering assistance in mitigating the damages and thereby fulfilling all our existing contractual commitments,” she said.
Radia, who also had an aircraft consultancy and leasing business in the initial stages, had made an unsuccessful attempt to start a low-cost airline, Magic Air. It was not given permission by the aviation ministry under Praful Patel. Sources say she played an important role in the setting up of Sahara Airlines for Subrata Roy.
The government today said it has granted Maharatna status to Bharat Heavy Electricals Ltd and Gas Authority of India Ltd.