Top Indian news site wins reprieve

Tehelka.com is one of India's best known internet sites

A leading Indian news site - famous for breaking a story on an arms deal scam - has temporarily overcome its cash shortage.

Earlier this week, the website had to shut down its operations because of a lack of funds.

The website's owners blame the cash shortage on an alleged government campaign to deter potential investors.

The website, Tehelka.com, last year ran a story which led to the resignation of senior defence officials, including a Cabinet minister and the chief of India's governing BJP party.

The firm has now been given a grace period to pay its outstanding debts to its server.

And a notice posted on the website, saying that staff had temporarily stopped updating it, has now been taken down.

Tehelka.com's latest financial troubles follow a round of sweeping job cuts earlier this year.

Tehelka.com caused a sensation in March 2001 when it released secretly recorded videotapes showing army officers and politicians accepting bribes from journalists posing as arms dealers.

Tejpal: the government is running a "huge vindictive campaign"

The story led to the resignation of Defence Minister George Fernandes and the president of the ruling party, Bangaru Laxman.

Mr Fernandes has since been reinstated to the post.

Now, more than a year after the expose, the website is feeling the squeeze on its finances.

Its editor-in-chief, Tarun Tejpal, said the site had not received any investment since it broke the arms scandal last year because of a "huge vindictive campaign" against the website by the government.

Potential investors had been "scared off", Mr Tejpal added.

Mr Tejpal told the BBC's World Business Report there were at least a dozen occasions over the past 18 months when the company had been close to signing an investment deal.

"At the last minute people have just drawn back because of fear of government retaliation," he said.

Legal work

The website now employs fewer than five people, down from about 120 a year ago.

It has no salaried journalists on its payroll, and has not done what Mr Tejpal calls "real journalism" for the past eight months.

"Most of our staff, mainly volunteers and well wishers, are caught up in the legal work on account of the number of cases lodged against us," he said.

The website is facing a number of legal inquiries related to the arms bribery case.

India's top federal investigative agency, the Central Bureau of Investigation, has carried out raids on its offices and senior Tehelka employees have been called in for questioning.

Investigations

But Mr Tejpal said he was still optimistic about that the site will survive.

Tehelka.com was a high profile entrant into the Indian new media market two years ago, and soon earned a reputation for its racy, often controversial style of investigative journalism.

The arms bribery story came shortly after the website released secretly recorded conversations by leading cricket stars on match-fixing.