STAR's ex-chief of ad sales Nayak joins NDTV arm  ( July '15,2003, ET)

LS (Raj) Nayak, STAR India’s former head of ad sales, is taking over as CEO of NDTV Media following an amicable out-of-court settlement of his nine-month old contractual dispute with his former employer, STAR India.

Raj Nayak will head the newly-formed NDTV company, which has been spun off to focus on the areas of ad sales, marketing, distribution and strategic consultancy. News content and broadcasting, however, will continue within the old NDTV’s purview.

While initially NDTV Media will cater to the needs of NDTV’s two-channel broadcasting operation, its expertise will be marketed to other media groups and TV channels at a later stage, industry sources said. NDTV Media is a recently-floated, closely held company promoted by Pronoy Roy and his wife Radhika Roy. Both of them are expected to be on board of the new company, these sources said.

Mr Nayak’s formal entry into NDTV was made possible after STAR withdrew its appeal before a three-judge bench in the Bombay High Court. This put an end to an injunction against Mr Nayak barring him from seeking employment with any other media entity. Raj Nayak’s resignation from STAR last October and his plans to join NDTV were challenged by the broadcaster on the grounds that it was a violation of a subsisting employment contract. The hard-fought legal dispute ended after STAR reached an out-of-court settlement with Mr Nayak last night.

The dispute between the two parties has taken a chequered path with a single judge, Justice Rajan Kochar of the Bombay High Court, ruling against STAR and vacating the injunction against Mr Nayak in January ’03. STAR filed an appeal before a divisional bench which in turn handed down a split verdict. Justice HL Gokhale held that STAR had not made out a prima facie case that Raj Nayak, as a senior company functionary, was privy to confidential information which could be used against STAR in case he joined a rival media company before the expiry of his employment contract.

On the other hand, Justice S Vajifdar took the position that the negative covenant of the employment contract, that barred Raj Nayak from seeking employment with rival media companies before the expiry of his contract on June 30, ’04, is legally liable to be enforced.

A special three-judge bench headed by Justice RM Lodha was thus constituted to end the stalemate. However, the out-of-court settlement between the two sides have ended what could have been a prolonged and expensive litigation.