Madras HC turns down Mirchi's plea against Red FM

Radio Mirchi sought deferment of the auctions claiming that the presence of Red FM in the auctions may lead to bid prices increasing

Mayur Lookhar | Mumbai | July 27, 2015

What was until now one group's struggle for a level playing field has potentially turned into a battle between two FM radio networks. Radio Mirchi, owned by ENIL (Entertainment Network India), had moved the Madras High Court early on Friday, July 24, 2015, seeking deferment of the Phase 3 FM e-auction. Mirchi made two prayers: i) Postponement of the auction; ii) impeachment as a respondent in Red FM's writ petition.

According to informed industry sources, Mirchi sought deferment of the auctions claiming that it feared that Red FM's presence would increase the bid prices.

The sources inform that Justice M Sathyanarayanan did not grant relief to Mirchi's plea on the ground that the government should not be deprived of additional revenues. He adjourned the hearing to August 21, 2015, which in effect means that the auctions can go ahead on schedule. The Registry raised an objection that an applicant can't ask for two prayers in one application. Hence, Mirchi gave up the first prayer for postponement.

Nisha Narayanan

When contacted, Red FM COO Nisha Narayanan said, "We are rather surprised that Mirchi filed an appeal on the premise that we would increase the bid amount during the e-auctions. However, we are a responsible player and would only bid on the basis of what makes commercial sense. Besides, any player in the auctions can increase the rates and not just us. So, Mirchi's contention is not justified."

Narayanan further said, "Our intent has always been to expand the industry and work towards evangelising FM radio in the country. Our only plea to the judiciary has been to give us a fair chance.”

When contacted, Radio Mirchi CEO, Prashanth Panday, said, "We had moved the HC asking that Red FM not be given 'conditional permission' to participate in the auctions. We have never said that Red FM should not be allowed to participate, only not allowed 'conditionally'. If a conditional approval is given, and later Red FM is disqualified, it can wreak havoc on all existing broadcasters as well as new bidders in the auctions. It can increase bids, migration fees and Reserve Prices for future rounds. We are saying that the court should rule their final order on Red FM. We hope and pray that Sun is allowed but it should be a final order."

The Ministry of Information & Broadcasting had debarred Red FM from participating in the Phase 3 auctions after the Home Ministry decided to withhold security clearances to Sun TV Network, which runs 33 TV channels and 45 FM radio stations under the brand name of Red FM and Suryan FM.

Sun TV Network's woes are due to a slew of litigations against the Maran brothers, Dayanidhi and Kalanithi Maran. The latter is the promoter of the Sun Group, which owns Sun TV Network. The brothers are under investigation by the CBI in two cases, one of which is the Aircel-Maxis case. Sun TV Network is also being probed by the Enforcement Directorate (ED) for alleged money laundering in the Aircel-Maxis case, which has also seen the attachment of assets worth Rs 742 crore.

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