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The Fera Censor

The Enforcement Directorate slaps notices on nine satellite channels

The Fera Censor

FERA has become a much feared four letter word for satellite channel owners. Besides grappling with the problem of low viewership and inferior software, television companies are now hard pressed to explain the source of foreign exchange used to hire transponder time on satellites. The Directorate of Enforcement has slapped notices under the Foreign Exchange Regulation Act (FERA) on nine TV channels and the move has set alarm bells ringing in some quarters. These are apprehensions that the move could be a warning signal to the channels to go soft on political coverage.

  • The recently-launched BiTV(Business India Television), which has a strong news component in its software mix, was among the first to receive the notice. These were 14 queries in all about its contractual agreement with the Russian firm, Intersputnik, from which it had leased a transponder on the Gorizont satellite. Of host of documentation was requested, including copies of clearances from the Reserve Bank of India (RBI) for foreign exchange payments to Intersputnik.

  • Ace TV, an entertainment channel partly owned by actor Jackie Shroff and international electronics giant Sony, received the notice on September 26, even before it got off' the ground. Perched on the much sought-after Panamast 4, its launch was scheduled for October 8.

  • This spate of notices could be a fallout of the JJ TV case. These have been raids on the Tamil channel named after Tamil Nadu Chief Minister J. Jayalalitha and run by the family of her confidante, Sasikala Natarajan. Last month, the Directorate arrested JJ TV's managing director (and Sasikala's nephew) T.T.V. Bhaskaran for alleged FERA violations involving $500,000. The money was paid to a US firm, Rimsat, to hire transponder time without RBI clearance. Both Ram Jethmalani, JJ TV's counsel, and AIADMK leaders imputed political motives to the investigation, pointing out that none of the either channels had been targeted by enforcement officials.

  • JAIN TV, currently off the air, and Zee TV are among the other companies to have received notices.

    The FERA censor probably won't end there. According to sources In the Directorate of Enforcement, more notices are in the offing. Officials in the department are themselves surprised by the orders from the top to investigate possible FERA violations by TV networks and have been working overtime to identify existing channels. According to sources, the notices have sent executives of erring channels scrambling abroad to clean up their books.

    It did not take long for the directorate to shoot off notices. However, while the notice to JJ TV was under Section 40 of FERA, which demands that the party respond in person, the current batch of summons under Section 33(2) is a demand for documentation, on the basis of which investigations will proceed.

    Where have the channels gone wrong? The widely accepted formula for starting a satellite 'TV channel is to tie up for software within the country and then hire transponder time through a middleman abroad. Since satellite companies have to be paid in dollars and RBI clearance takes time, the short cut adopted by many channel owners is to tap middlemen who release the dollars after being paid in rupees.

    While no one is willing to go on record, there is a strong suspicion that the notices constitute delicate arm-twisting on the eve of the 1996 Lok Sabha elections. Although their reach in comparison to Doordarshan's terrestrial network is limited, the satellite channels can be a powerful influence. However, according to a channel executive, using FERA to compel independent networks to toe the line is like crushing an ant with a sledgehammer. As a Zee TV official says, "Usually a telephone call is enough."

    Star T'V was the first to attract the attention of enforcement agencies. It had obtained permission to open an office in Delhi strictly for liaison. However, its aggressive marketing of air time led the Government to surmise that it was actually a marketing set-up. Star TV's defence was that the revenue generation was done by RBI-approved agents of the network and advertisers made payments against export earnings. And the case died down.

    Initial suspicion of independent channels gave way to resignation when it became clear there was lit-tie it could do about the invasion from the skies. However, now that the channels have turned from entertainment to current affairs programmes and newscasts, the Government appears to have decided to rein them in. It remains to be seen whether the Directorate will pursue the investigations or whether the channels will succumb and soften their coverage.

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