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Why Radio Mirchi moved Madras HC in Sun FM radio case

MUMBAI: Entertainment Network India Ltd (ENIL), which runs private FM brand Radio Mirchi, moved the Madras High Court and intervened in the Delhi High Court, seeking either ‘unconditional’ participation by Sun Group or postponement of the first batch of Phase III radio auctions.

The Madras High Court had issued an interim order allowing three Sun Group companies, namely Kal Radio, Sun TV and South Asia FM Ltd, to participate in the auctions, which are scheduled for 27 July. However, the court had added the directive that the results of Sun Group’s bidding be kept in a sealed envelope and furnished in court at the next hearing.

Moreover, the court had given four weeks to the government to reply. The decision on Sun Group’s participation is subject to the result of the main writ petitions filed by the broadcaster.

Radio Mirchi’s contention is that the condition, if applied, would harm other private FM broadcasters. It pleaded to the Madras HC that Red FM be given either full approval or no approval at all, and that if it requires more time, the auction be delayed.

In its impleading, ENIL sought the court’s direction to conduct auctions after the final hearing on the petitions and to expedite the hearing.

Prashant Panday“We had argued that Red FM should not be given ‘conditional approval’. They should be given either full approval or no approval at all. Conditional approval in a simultaneous ascending e-auction is not doable,” ENIL MD and CEO Prashant Panday told TelevisionPost.com.

“The [Madras] HC order wasn’t tenable. So we asked for a final order. It would be all right if that meant delaying the auctions by a few days.”

However, the Madras High Court did not agree with ENIL and its conditional order continues, Panday informed.

Red FM COO Nisha Narayanan also confirmed to TelevisionPost.com that the Madras HC rejected Radio Mirchi’s petition. “As things stand now, we are allowed to participate in the auctions,” she said.

In its petition, Radio Mirchi made it clear that the company does not have any objection to Sun Group’s participation in the auctions. However, it raised serious concerns about keeping the results sealed as each broadcaster has a separate computer terminal to follow the progress of the auction.

“To that extent, the result is already public and no useful purpose would be served by keeping the results in a sealed cover,” the petition read.

Further, with Sun Group having a conditional interim permission, the whole migration process will be in a state of suspended animation leading to chaos and uncertainty on the future of the present licensees because the bid prices would determine non-refundable one-time migration fee.

The petition added that this would also lead to reckless bidding as the Sun Group and similarly placed bidders would have no obligation to operate the licences even after winning, should the court finally disqualify them. It would raise bids unfairly and hurt the interests of other fellow bidders and broadcasters.

Additionally, it raised the concern that if bidding was done afresh, bidders would already have exposed their strategies in the cancelled auctions.

Nisha Narayanan

Narayanan added, “I am rather surprised that Radio Mirchi filed an appeal on the premise that we would increase the bid amount. We are a responsible player and would only bid for what makes commercial sense. The contention is not really justified in this matter.”

Incidentally, the three abovementioned Sun Group companies had filed petitions in the Madras HC, while Digital Radio Broadcasting Mumbai and Digital Radio Broadcasting Delhi, the two companies that run Red FM Mumbai and Delhi, respectively, had filed separate petitions in the Delhi High Court.

Though the Delhi HC had allowed the companies to participate in the mock auction, it has not passed any interim order yet. It will have a final hearing of the matter today (Saturday, 25 July).

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