Fearing Reckless Bidding by Sun, Radio Mirchi Moves HC to Postpone FM Auction

Noting that the licenses of all phase-II players would expire only in September, he sought to postpone the auction till the present issue was settled.

Published: 25th July 2015 12:10 AM  |   Last Updated: 25th July 2015 12:10 AM   |  A+A-

CHENNAI: A day after Madras High Court allowed Sun Group to participate in the auction for phase-III FM radio broadcasting license scheduled for July 27, its competitor Radio Mirchi moved the court seeking to postpone the auction till the cases of Sun Group were decided.

“Radio Mirchi and also other bidder companies are likely to face grave and irreparable injury in case the auctions are allowed to be held with conditional participation of Sun Group,” said Shyam Tallamraju, vice president and cluster head of Radio Mirchi.

On Thursday, Marans-owned Sun Group was allowed to participate in the auction, with a condition that its participation and bidding would be subject to the outcome of the six petitions moved by Sun TV Network, KAL Radio, South Asia FM and two of its share holders.

“As Sun Group would have no obligation to operate the licenses even after winning should the court finally disqualify them, they are likely to bid recklessly, thus raising bids unfairly and hurt the interests of all other fellow bidders and broadcasters,” contended senior advocate TV Ramanujam, seeking permission for Radio Mirchi to intervene and be added as respondents in the petitions moved by Sun Group.

“Further, this unfair winning bids would become the reserve price for future rounds of auctions and will thus continue harming the interests of other broadcasters in all times in perpetuity,” he added.

Pointing out a similar scenario that happened in 1999-2000, Ramanujam said, “In that auction, many bidders bid up the prices and then simply refused to pay up and operationalise their licenses. They merely suffered the loss of their earnest money deposit, a small sum of money. The other serious broadcasters, however, were harmed irreparably, having to launch operations at unfairly high prices.”

Noting that the licenses of all phase-II players would expire only in September, he sought to postpone the auction till the present issue was settled.

Opposing Radio Mirchi’s plea, senior counsel PS Raman who appeared for Sun Group said, “The issue is purely between the Union of India and Sun Group. There is no justification to implead them in the case. Moreover the bidding authorities are not even aggrieved by the order of this court, allowing Sun to participate in the auctions.”

Justice M Sathyanarayanan, after hearing both the parties said, “I can not direct the government to postpone the auction. I have already mentioned in my interim order that if the bid prices are to go up by allowing the petitioners to participate in the auction, it would ultimately benefit the country.”

The judge then posted the matter to August 21 to file counter affidavits by the petitioners.

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