The Hindu : Now, Radio City under the scanner

Online edition of India's National Newspaper
Wednesday, Aug 13, 2003

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National

Now, Radio City under the scanner

By Our Special Correspondent

NEW DELHI AUG. 12. After Star News, it is now the turn of another Rupert Murdoch venture — Radio City — to be put under the scanner with the Union Minister of State for Information and Broadcasting (I&B), Ravi Shankar Prasad, today ordering an inquiry into its licence agreement and funding pattern. The review will also examine whether the foreign equity stipulations are being adhered to both in letter and in spirit by Star's FM venture.

While Mr. Prasad has asked the I&B Ministry to look into the relationship between Music Broadcast Private Ltd. (MBPL) — which holds the licence for running Radio City — and its content provider, Digiwave, the matter will also be referred to the Departments of Law and Company Affairs.

According to the guidelines, the licencee should generate the content, carry out the broadcast, and not transfer it to another entity. However, in the case of MBPL, the content is being provided by Digiwave - a subsidiary of Star India Pvt. Ltd. of which the wholly foreign-owned Star Group Ltd. is the holding company.

Also, the Ministry has found the debt equity ratio of MBPL questionable. As of now, Digiwave is said to have provided a loan of Rs. 58 crores to MBPL. With the equity base of MBPL being only Rs. 1 lakh, its debt-equity ratio works to 5800:1 while the acceptable level is 2:1. On these two counts alone, the Ministry has found its guidelines being sidestepped as Digiwave is not only practically funding the MBPL's entire operation but also providing all the content to its radio station, Radio City, which is currently operational in Delhi, Mumbai, Bangalore and Lucknow. Such being the case, MBPL has been asked to furnish details of its relationship with Digiwave.

The Minister's decision comes even as Star News' application for uplinking for Media Content and Communications Service (MCCS) — the company it created to work around the foreign equity stipulations — is under scrutiny. Even in this case, an inter-ministerial group set up to examine the Star News' application has found that it does not meet the guidelines both in letter and in spirit.

While Star News' application and the entire uplinking policy will be referred to a Group of Ministers, the review of Radio City's operations is being done on the eve of the country's bid to move into the second phase of FM broadcasting. Meanwhile, representatives of Zee, Sahara, Aaj Tak and NDTV — all of which have news channels — met Mr. Prasad today; purportedly to discuss the implementation of the Conditional Access System and impress upon him the need to put in place a regulatory mechanism for broadcasters.

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