New Delhi : The Delhi High Court quashed a government order and allowed Red FM, partly owned by Sun TV Network Ltd, to take part in the phase-III FM auctions starting Monday.
The high court set aside the information and broadcasting ministry’s order rejecting Red FM’s application to participate in the auctions for 135 new FM radio stations across India. The ministry had rejected Red FM’s application citing denial of security clearance to the company by home ministry.
The home ministry had denied security clearance citing ongoing judicial proceedings and allegations of money laundering against Sun TV promoter Kalanidhi Maran and his brother Dayanidhi Maran.
Sun TV holds majority stake in South Asia FM Ltd, which in turn holds a minority stake in Digital Radio Broadcasting Ltd (Delhi) and Digital Radio Broadcasting Ltd (Mumbai) the two companies which own Red FM 93.5.
Marans indirectly hold 22% in the two Digital Radio companies. Lawyers for Red FM said the controlling stake in the two Digital Radio Broadcasting companies were with a family from Hyderabad, which owned 51% of shares in the two companies.
The government had argued that it did not want to work with companies that did not have security clearance. The government also said anyone with more than 10% stake in a company can exercise significant influence in a company.
The high court said it resorted to the unusual practice of pronouncing an order on a Sunday and hearing arguments on a Saturday because of the national interest involved in the case.
Sun TV had argued that the company’s phase-II licence is expiring in September, and if the company doesn’t get security clearance for the phase-III auctions, it will become very difficult for them to get its phase-II licence renewed. Friday, Sun TV Network shares ended at 279.70 rupees on the National Stock Exchange, up 2.0% from the previous close. -Cogencis
