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MIB revokes registration of Kalanithi Maran’s Kal Cables

MUMBAI: In a major setback to Kalanithi Maran’s cable TV business, the Ministry of Information & Broadcasting (MIB) has revoked multi-system operator (MSO) Kal Cables’ permanent registration for digital addressable system (DAS) due to denial of security clearance by the Ministry of Home Affairs (MHA).

“In view of denial of the security clearance by the Ministry of Home Affairs (MHA) regular registration cannot be granted to Kal Cables in terms of provisions contained in Rule 11C and accordingly the permission granted to Kal Cables stands cancelled with immediate effect,” the MIB has said in its letter.

The MIB had sent a letter to Kal Cables on 20 August informing about the cancellation of registration.

The ministry has asked Kal to wind up its operations within 15 days and switch off signals. It has also asked Kal to run a scroll on the screen informing cable operators/customers about the same.

Kal had got permanent registration for the Chennai Metropolitan Area on 19 June 2012.

Kal Cables moves Madras HC

The MSO today challenged the cancellation in the Madras High Court, which has reserved its judgment in the case for tomorrow.

Kal has alleged that the cancellation was done without so much as issuing a show-cause notice. The cancellation notice, it argued, does not clarify why it was denied the security clearance.

It further stated that it has been operating as an MSO since 2006 with due permission and was later granted DAS licence to operate in Chennai. “There has been no change in business activity and no change in any circumstances for the MHA to suddenly refuse security clearance,” Kal maintained.

The MIB has so far cancelled registration of 16 MSOs including Pune-based Intermedia Cable Communications (ICC), Amritsar-based Godfather Communication and Digicable’s Kolkata joint venture DigiCablecomm Services. All the three MSOs have successfully challenged the MIB’s cancellation order.

The political angle

The MHA and the MIB are silent on why security clearance was not granted to Kal Cables.

It may be recalled that the Maran brothers have been allegedly entangled in the 2G scam that occurred under ex-telecom minister and Kalanithi’s brother Dayanidhi Maran. The scam is being probed by the Central Bureau of Investigation (CBI).

The CBI has reportedly built a “strong case” against Dayanidhi for allegedly favouring Aircel after it was bought by Malaysia’s Maxis by granting it several licences that had been refused earlier.

According to media reports, the investigative agency has uncovered a money trail tracing Rs 650 crore (Rs 6.5 billion) invested by Astro Group to buy shares at inflated prices in direct-to-home (DTH) company Sun Direct owned by Kalanithi’s Sun Group, which also owns the Sun TV Network.

The change in government at the Centre with the formation of Narendra Modi-led National Democratic Alliance (NDA) government has, perhaps, turned the fortunes of the Marans for the worst.

The Marans are closely associated with uncle Karunanidhi’s DMK party, which was part of Congress-led United Progressive Alliance (UPA) that was voted out of power in the recently concluded general elections. Dayanidhi was an MP from DMK and a minister in the UPA government.

DMK’s principal rival AIADMK headed by J Jayalalithaa enjoys cosy relationship with the NDA government. In fact, it was Jayalalithaa who had revived state-owned cable TV corporation Arasu Cable to break Sun Group’s monopoly over cable TV distribution business in Tamil Nadu.

Arasu has since then emerged as the biggest MSO in Tamil Nadu with 7.52 million subscribers across the state except Chennai since it does not have a DAS licence. Arasu’s DAS licence has been hanging fire with the central government for more than three years.

The growth of Arasu led to a corresponding decline in fortunes of Kal Cables, whose presence today is effectively limited to Chennai, as local cable operators (LCOs) were not willing to align with the MSO for fear of being hounded by Jayalalithaa’s party which currently rules the state.

Recently, Jayalalithaa had taken up the issue of DAS licence with Prime Minister Narendra Modi and later followed it up by writing a letter to I&B minister Prakash Javadekar.

The government has still not decided whether or not to grant DAS licence to Arasu amid recent recommendations by the broadcast regulator TRAI that government or government-owned entities must not be allowed to enter broadcasting sector.

In fact, I&B minister Prakash Javadekar had recently revealed that the government has rejected applications of the government of Punjab and of West Bengal to enter the broadcasting space.