Will The Sun Set On Maran’s Empire?

Full disclosure: The writer holds shares in SUN TV as part of his equity portfolio

There’s hardly anyone in the southern states who is immune to the reach of the Sun Network (Sun). If you’re not watching one of their 33 satellite television channels across four languages, through their own cable operators, you’re listening to one of their 45 radio stations across the country, or reading one of their many newspapers and magazines.

Apart from this, you could be watching one of several films a year distributed or produced by them, or you could be watching their cricket team, Sunrisers Hyderabad, playing in the Indian Premier League. Until recently you could also have been flying their airline, SpiceJet, but that has now been sold off.

The Sun Network is owned by Kalanithi Maran, a Dravida Munnetra Kazhagam (DMK) stalwart, whose brother Dayanidhi Maran is a former Union telecom minister. The Marans live in the Boat Club Road area in Chennai, easily the most expensive residential real estate in the metropolis, and are among the few media barons who manage to turn a healthy profit from their ventures.

They employ over 2,000 people and Sun has a turnover in excess of Rs 2,000 crore.

So, when the Ministry of Home Affairs (MHA) wrote to the Ministry of Information and Broadcasting (MIB) denying security clearance for the 33 channels operated by Sun, and the news leaked to the press, there was widespread consternation about whether everyone’s favourite television channels would go off the air.

The story so far

For those in the know, the move by the MHA did not come as a great surprise, since as far back as September 2014, the MIB had issued an order cancelling the registration of Kal Cables, the cable operator subsidiary of Sun, which operates in Chennai and Coimbatore, on account of the denial of security clearance by the MHA.

Kal approached the Madras High Court, which promptly set aside the order of the MIB, asking, quite reasonably, how the grounds for the denial of security clearance applied only to the cable operator, while the TV channels operated by the same promoter are running without restriction.

Nothing further was heard of this matter until the news broke earlier this month about the MHA’s denial of security clearance to the 33 channels. The denial of security clearance is reportedly on the grounds of a threat to “economic security” on account of pending cases against the Maran brothers, including allegations of corruption, money laundering and abuse of Dayanidhi’s ministerial position.

Significant as these cases may be, none of them have yet concluded and the Marans have not yet been convicted of any wrongdoing in any of them.

Who decides on national security?

The provisions of Section 20(2) of the Cable Television Networks (Regulation) Act, 1995 are broad, and permit the central government to stop the broadcast of a TV channel if it thinks it “necessary or expedient” in the interest of, among other things, “security of India”.

To add to this, the Supreme Court (SC) has held (in relation to another legislation) that questions of national security are a matter of policy for the executive to decide, and is not something for the courts to interfere in.

The SC also held that national security may include a broad range of matters including “economic stability and strength”. If this wasn’t enough, the judgment goes on to say the affected parties need not be provided a hearing, or supplied any reasons for such an order.

The combined effect of all this is a dangerous provision that could be used by governments to shut down broadcasts that displease them (whether on account of their content, or on account of the identify of those making such broadcasts), with very little fear of legal review, and virtually no need for transparency.

A government trying hard to come across as “business friendly” does itself no favours when it uses such an opaque and onerous provision to target the operations of a business entity, and the implications on free speech (something which this government has not, so far, considered a priority), are disastrous.

MIB vs MHA: ‘Sources say’

Whether for these reasons or otherwise, from the various reports in the press, it appears that the MIB is not in favour of this move, and the ministry, under Arun Jaitley, has been at pains to counter the position of the MHA, under Rajnath Singh.

Both ministries appear to be leaking their views to various media by way of anonymous sources. “If the MHA has decided to decline security clearance to a company, it should either directly convey the reasons to the affected company or let the I&B ministry cite those reasons,” an MIB source told The Indian Express, for instance.

It’s with this background that the MIB decided to refer the matter to the AG, specifically to seek his opinion on whether economic violations would amount to a threat to the security of the country.

The AG is reported to have opined in the negative, stating that the denial of security clearance was “not legal.” It would be very interesting to have a look at the contents of the opinion and the reasoning, since it appears to deviate from the broad interpretation of “national security” by the Supreme Court.

This has been followed by the  Prime Minister’s Office weighing in on the matter, coming down on the side of the MHA, supporting the decision to deny security clearance to the Network’s TV channels. Another source, this time from the MHA, has told The Economic Times that “we maintain our position that reversing a decision on the Sun TV’s clearance issue would be a setback to government’s efforts (against) corruption and crony capitalism…”

It’s worth noting here that the MIB (along with the MHA) has now chosen to file an appeal against the order of the Madras High Court with regard to Kal Cables, which goes against its position on the TV channels, and shows a level of agreement between the two ministries which they are struggling to achieve on the current issue.

This entire story has been communicated to the media and the public by way of anonymous sources and strategic leaks, and offers a fascinating insight into the operation of the Union government. Some of the statements from these sources are so detailed and specific that they could be mistaken for official press statements.

An act of policy signalling?

While it is impossible to ascertain the precise motivations of the respective ministries, the unusual spectacle of two ministries sparring (all but) publicly compels one to speculate on what exactly is going on behind closed doors.

One possibility is that this a case of genuine disagreement within the Cabinet, where the MIB and MHA disagree fundamentally on the issue. And that while the MHA believes it is targeting allegedly corrupt promoters, the MIB is of the view that such a move is either legally untenable and/or ill-advised from a policy perspective.

Evidently, the objective of coming across as a “business friendly” government can sometimes clash with the objective of coming across as a government that is tough on corruption.

The second possibility is that it is an act of political signalling — not policy implementation — and that this a choreographed attempt to convey that the government is doing its best to take action against the Marans, but is unfortunately being held back by legal technicalities.

This would serve the dual purpose of gaining the government some anti-corruption PR, and sending a message of support to the All India Anna Dravida Munnetra Kazhagam (AIADMK). It is also worth keeping in mind that the DMK’s arch rival, the AIADMK, has 37 seats in the Lok Sabha and 11 seats in the Rajya Sabha, giving it a pretty handy combined tally of 48 out of 788 seats in the event of a joint sitting of the houses, something that the BJP may have to resort to eventually to break the Congress party’s grip on the upper house, especially on the contentious issue of the Land Bill.

Whatever the reasons may be, the implications of such an action on a company of the size and reach of Sun is bound to be massive, both economically and politically. However, until there is some public and official communication on the matter, it’s hard to predict what the future holds for the 2000+ employees and the several million viewers of Sun, and what implications this will have on the government’s image.