Money, politics, power struggles — Pakistan’s media scandal has it all

KARACHI, Pakistan — A government raid on the company that is bankrolling Pakistan’s newest media conglomerate has highlighted the corruption and infighting within the country’s news industry.

A front-page article in The New York Times early last week accused Karachi-based Axact — which calls itself “the world’s leading IT company” — of selling fake diplomas in an “internet-era scheme on a global scale.”

The story broke as BOL, the media company financed by Axact, was preparing its long-delayed launch in mid-summer. The wheels are now coming off the project. Over the weekend, BOL’s top two news executives and some staffers resigned.

“[T]his is a massive conspiracy by the seths of the Pakistani media industry to defame BOL and Axact and derail the launch of BOL,” the company said in a statement on its website after the Times story broke. (“Seth” is a South Asian term for “chief” or “merchant.”) In defiance of the resulting media furor, BOL moved up the TV channel’s launch date to mid-June. Its English- and Urdu-language newspapers were scheduled to follow in the fall.

The controversy underlines the deep divide in Pakistan’s media, with corporate owners beholden to powerful forces in the civilian and military wings of the government, which are in a constant struggle for control.

“Storm against BOL is war of media moguls,” tweeted political analyst Fawad Hussain. “#Axact corrupt or innocent. Whatever. But BOLtv gave sleepless nights2 media owners who feared losing monopoly,” wrote Rauf Klasra, a journalist at ARY television.

The Express Tribune, which publishes the international edition of The New York Times as an insert, had long known about the allegations against Axact — which calls its employees Axactians — but was prevented from publishing by a court order prompted by an Axact lawsuit, according to media sources in Karachi.

The Times story unleashed an avalanche of articles in the Pakistani media, with headlines like, “Who is the real owner of Axact?"; “Why I left Axact: The Inside Picture”; and “Employees were berated, threatened if they did not meet their targets” (DunyaNews).

But some media houses — with different political allegiances — took a more measured approach. “My hats off to newspapers like @dawn_com and the @The_Nation because they kept the banner of fair coverage of #Axact,” tweeted Murtaza Solangi, former director general of Radio Pakistan, referring to two of Pakistan's largest media companies.

Rumors have long swirled around the impending launch of BOL, many centering on the question of who was really behind the nascent media group. Some in Pakistan’s media and political circles speculated that the military was using BOL, which recruited many of the top figures in Pakistani journalism, to force other media groups into line. In a nation rife with conspiracy theories, there was even speculation BOL was an elaborate ruse that would never actually launch.

Axact and BOL vehemently denied all those claims.

“We will be the first organization where editorial decisions will be made in the newsroom, not at the owner’s desk,” Kamran Khan, president and editor-in-chief of the BOL Media Group, told GlobalPost in a meeting at BOL’s partially complete headquarters building last month. At those other media houses, he said, “business interests come first.”

“For us, it’s a legacy; we want to make a real difference in the paradigm of media thinking,” added his colleague Azhar Abbas, president of BOL News.

But over the weekend, Khan and Abbas announced their resignations on Twitter. Previously, both were senior executives at rival GEO TV, which ended up in a major confrontation with the military after it blamed the Army’s intelligence wing for the 2014 attempted assassination of one of its anchors.

The resignations came three days after the channel defiantly moved up its launch date and began test transmissions. Screenshots from the BOL website with the faces of high-profile journalists crossed out began making the rounds on social media even as Axact filed suit against a blogger for aggregating the many tweets making fun of the company’s travails.

Meanwhile some of the other high profile journalists hired by Axact/BOL stayed on the offensive. Anchor Mubasher Lucman announced he would remain with the channel after issuing a warning to the competition: “#Axact #BOL TV story from media houses is sickening, there is a lot beneath the skin & they would wish they had never started this campaign.”

The Axact/BOL scandal highlights the murky finances and complicated political relationships that underpin the Pakistani media landscape. Top editors say it is common for media companies to owe millions in unpaid taxes and debts to banks, or to generate profits under the table while saying they lose money. These sources claim that leaves media houses open to pressure from the rival civilian and military wings of the government to shape coverage. The government also ultimately controls a large portion of the country’s advertising expenditures.

“They immediately say ‘yes,’” when the military orders them to report or suppress a story, “because the military has their dirty laundry,” said Badr Alam, editor of The Herald, a monthly magazine that is part of the rival Dawn media group.

“It’s so easy to control those organizations because it’s easy to control the owners,” BOL’s Khan said in Karachi last month. “They are making money but not showing it or paying their taxes. If you are not officially making money for six months, you are making it somewhere else.”

But the subsequent scandal, which led Khan to resign, raises the question of whether the man Khan and many others in the Pakistani media elite went to work for was any different. Pakistani newspapers reported last week that Axact’s chief executive, Shoaid Shaikh, paid the equivalent of 25 cents in taxes last year. And the government tax office has launched a full investigation into the company’s finances.

As for the conspiracy theory that BOL would never launch: it’s looking more and more credible by the day.

Lawrence Pintak, founding dean of The Edward R. Murrow College of Communication, is a veteran foreign correspondent. His books include "The New Arab Journalist" and "Reflections in a Bloodshot Lens: America, Islam & the War of Ideas."