Government still awaiting MBPL replies in Radio City case

NEW DELHI: The government today reiterated that it has nothing against any business venture run by Rupert Murdoch's Star Group Pvt Ltd through its Indian arm here.

At the same time, it expects that the company should come clean on various issues. The sentiment is linked in part to what it considers the "wishy-washy" replies given earlier by Music Broadcast Pvt. Ltd. that operates FM radio stations in various cities.

Asked whether MBPL, a PK Mittal company, has reverted to the information and government ministry with clarifications sought from it, a senior ministry official replied in the negative.

"They have till 15 September to come back with detailed answers and we would expect that this time round they are more forthcoming instead of the vague answers that were given to us earlier," the official said, adding however, that Radio City's "opaqueness" seems to be more than that of Star News.

Radio City is the brand name under which MBPL, the licence holder, operates FM radio stations. The company has a marketing, ad sales and content agreement with Star through a subsidiary company of the latter. The government had put the venture under a scanner saying that in this sector too, Star was trying to make a backdoor entry, especially when foreign investment is not allowed in the segment.

That the government seems to be doing some homework is evident from a letter dated 3 September that the ministry has sent to Star and MBPL.

According to the four-page letter, "It may also be clarified as to why and in what circumstances, the loan agreement as also the programme content sourcing agreement has been signed with DigiWave (apparently a subsidiary of Star India) only in October 2002, whereas loans and content had been taken much earlier. This appears to be contrary to commercial practices."

Adopting a line of inquiry done for Star News and Media Content Communications Services India Pvt. Ltd. (MCCS), the ministry letter concludes that MBPL seems to be a shell company with no real powers despite being the licence holder for the FM radio venture.

"In view of the facts detailed, it has been concluded that de facto control of MBPL is being exercised by another company. The complete assignment of content creation and terms and conditions of the loan agreement suggest that MBPL is only a proxy company with real control vesting elsewhere (meaning DigiWave)," the ministry observed. It was also pointed out that response may be submitted within ten days (by 15 September) as to why the licence should not be cancelled for violation of Clause 15 of the licence agreement, which states that the licencee shall not sub-contract, assign or transfer the broadcast responsibility.


Meanwhile, the government also denied that Star News and MCCS have sought an extension of the deadline for complying with the revised uplinking norms.

"The company has been given all the details and it is up to them to come back to us with a fresh application," the government official said, indicating no fresh application, post restructuring of the company shareholding, has been made yet.

However, the official added that the government does not foresee much delay and problems in processing the fresh application as most of the permissions and clearance have been obtained earlier. "Certainly a home ministry clearance for the new shareholder(s) would have to be taken, but that should not take too long presumably," the official said.

On the Star News front, also learns that James Murdoch and other top bosses of Star India have already flown out of the country to Dubai for a sales meet.

Did Murdoch meet Bennett, Coleman & Co. managing director Vineet Jain today as has been rumoured? No official word is forthcoming from any of the sides, but it is a fact that the stridency that had been exhibited by Economic Times and Times of India regarding Star and its various operations in the past has lessened.

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