“We have to go on like a scratched record and say we have done nothing wrong. All the cases are at a stage where this is simply an allegation. Even assuming that there is something untoward, the matter should start and end with the individual and not penalising the company,” said SL Narayanan, Sun Group’s Chief Financial Officer.
The first formal communication from the Government was received by the group on Thursday night disqualifying it from participating in the FM radio auctions. It, however, has not heard anything on the fate of its 33 TV channels.
While the group has been making attempts to seek clarity from the powers that be on its broadcasting licences renewal, with little luck, it now finds itself in a fix on its plans. In conversation with BusinessLine, Narayanan shares the dilemma he faces to maintain the group’s brand and retain investor interests. Edited excerpts:
Broadcasting licence is given every 10 years. It is renewed by the Information and Broadcasting Ministry after security clearance from the Home Ministry. Most of our channels have licence till 2021 and some are expiring in 2022 and a handful in 2023.
What security risk do these channels pose?
What we show are commercial films, soap operas, and reality television, there is no way anyone can advance a viewpoint that we are a security risk… .
When you meet powers that be what is the feedback you get?
First of all the powers that be should agree to meet us. There is no communication. All we hear is what is reported in media. Last night, we have received first ever communication from the Ministry of Information and Broadcasting as to why the Government has decided to disqualify us from the FM Radio Phase III auction.
We will move court on Monday against this decision. We hope we will get relief from the court since our senior counsels are pretty confident that we have a strong case.
If we do not participate in the auction, it will certainly reduce the intensity of the bidding with less competition. Besides, if we do not participate, the amount of money the government earns from this auction will be impacted.
On the fate of 33 channels of Sun TV nothing has been communicated.
Worst case scenario (if allegations are proven right) is the business protected?
Even assuming, but not admitting, that the promoter is guilty, proceeding against him have to be completed first. Where is the need to put our radio business in jeopardy so prematurely? This is strange case of vicarious liability attaching to the company from the acts allegedly committed by the shareholder. In my limited understanding of law, this is unprecedented.
There were reports that you might sell the company? Your foreign investors are moving out do you feel the financial strain? Where do you see risk most?
No Sun TV is not for sale.
It is unfortunate (that foreign investors have moved out) but I cannot blame them. The shareholders have lost ₹ 7,000 crore of their wealth in the past few weeks.
Our risk is basically from the States. But, as of now, it is business as usual. Our lead has become better with BARC ratings. The business side has been insulated from all this till now. Till now, advertisers have not shown concern.
There were reports that security clearance may be given if the company’s equity structure undergoes a change (Kalanithi Maran either dilutes or exits). Have you heard anything on this front? Will you consider the same? Is there a possibility of merging Sun Direct with Sun TV?
I do not know if any official has said so. We have not heard anything. We are deeply disturbed by this.
The current state of affairs is pretty disappointing.
The two businesses have very different characteristics and both have their own business models. We cannot merge them.