Radio Mirchi Moves Madras HC to Defer FM Auction

Petitioner firm files plea expressing fears that the Sun Group may bid recklessly.

Published: 25th July 2015 04:33 AM  |   Last Updated: 25th July 2015 04:33 AM   |  A+A-

CHENNAI: A day after Madras High Court allowed Sun Group to participate in the auction for phase-III FM radio broadcasting licence 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 licences 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 licences. 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 licences of all phase-II players would expire only in September, he sought to postpone the auction till the present issue was settled.

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.”

The matter has been posted to August 21.

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