The Telegraph
Since 1st March, 1999
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Licence scare sends STAR radio to govt door

New Delhi, Sept. 15: Radio City, the FM channel propped up by STAR, has sought a hearing in the Union information and broadcasting ministry after being asked a flurry of questions on its business, raising doubts on its credentials to hold a licence as a foreign company.

Radio City is aired in Delhi, Bangalore, Mumbai and Lucknow.

Music Broadcast Private Limited (MBPL), the Ispat Group company which holds the licence to run Radio City, has also approached Bombay High Court seeking an order to restrain the government from suspending or revoking its FM radio licence.

MBPL’s reply to the ministry’s notice issued on August 12 was being examined today. The company complained that the public questioning of it was bad for its business.

Information and broadcasting ministry sources said they were not satisfied with the company’s response to questions on its arrangements with Digiwave, a subsidiary of STAR India Private Limited which was the exclusive content provider to MBPL. “They need to tell us more on their relationship with Digiwave,” the sources said.

But Radio City has resented this line of questioning. Outsourcing was a commercial arrangement that it had worked out, the company said. Outsourcing was also not prohibited in the guidelines on FM radio licensing, it was pointed out.

The company also responded to the government’s query on its “high debt equity ration” by stating that this was a normal practice for greenfield ventures.

Information and broadcasting minister Ravi Shankar Prasad ordered a probe into Radio City’s right to hold an FM licence after the Indian Media Group, a media industry body, petitioned the government.

The probe into STAR’s eligibility to promote the radio channel was on the lines of the inquisition by the ministry into Media Content and Communication Services (MCCS) that has applied for an uplink licence for TV news.

The important difference is that while the probe into MCCS was carried out even as the government was framing its policy on foreign investment in TV news companies, the questioning of Radio City began after the FM channel was up and running.

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