In the unseemly battle between journalism and the media industry, the securities market regulator has stepped in to stem the rot in the latter. Media organisations have been increasingly passing off sponsored content as unbiased journalism to unsuspecting readers and audiences. This is being done often through private treaties signed between these organisations and the corporate sponsors that offer a share in their equity in return. But now, Securities and Exchange Board of India (SEBI) has prevailed upon the Press Council of India to direct mandatory disclosure of stakes in companies that are reported on by the media.

As a result, disclosures regarding stakes held by the media company will have to be made in the news report of coverage of any sort on the companies in which the media company holds such stake. What’s more, as per the recent press release issued by SEBI, disclosure on percentage of stake held by media groups in various companies under such private treaties will have to be made on the websites of the media groups concerned.

The idea is to bring in much-needed transparency so that the readers and audiences are able to make out sponsored, or paid, content for what it is and are not misled into mistaking it for a credible journalistic exercise. Curiously, though, SEBI’s press release mentions that the Press Council accepted its suggestions in a meeting held on February 22, 2010. So why did it take six months for this information to be made public?

Be that as it may, SEBI has done what the media organisations should have resolved themselves. “It was felt that such agreements (private treaties) may give rise to conflict of interest and may, therefore, result in dilution of the independence of press,” the press release states, “This may consequently compromise the nature, quality and content of the news/editorials relating to such companies. Needless to say, biased and motivated dissemination of information, guided by commercial considerations can potentially mislead investors in the securities market.”

Quite. The unfortunate part remains that media itself should have worried about such consequences to begin with and at least got together to lean upon the black sheep in the industry. Now the least it can do is implement the directives.