FERA violations -- Probe against Zee, Star, Sony on, says Govt

FERA violations -- Probe against Zee, Star, Sony on, says Govt
PRESS TRUST OF INDIA

New Delhi, Aug 28: The Centre today informed the Delhi High Court that it is vigorously pursuing investigations against Zee, Star and Sony TV companies for alleged Foreign Exchange Regulation Act (FERA) violations relating to revenue earned by them through advertising in India.

"Investigation against Zee Telefilms Limited is going on for the past more than a year and so far as Sony and Star are concerned investigations started only recently," Additional Solicitor General (ASG) S B Jaisinghani told a division bench comprising Chief Justice Arijit Passayat and Justice D K Jain during the hearing of a civil writ seeking thorough probe into the matter.

Jaisinghani appearing for the Enforcement Directorate (ED) said the government was pursuing the probe vigorously and it would continue till the matter was brought to a logical conclusion.

"We are after them. We took action against Zee on our own and show cause notices were issued to at least 1,000 people by the Directorate," he said.

However, the court referred the petition to a division bench hearing criminal matters after Zee counsel Rajiv Nayyar informed that his client's petition challenging ED action was pending before that bench.

Nayyar said the Criminal bench in a previous order had directed the Ministry of Finance and ED to file further affidavits on the status of investigation against Zee.

The civil writ filed by Ajay Jain alleged that since 1993 foreign exchange worth Rs 3,500 crore had been illegally taken out of the country by these companies.

Jaisinghani said the investigations against Sony and Starwere still at the primary stage.

Jain's counsel Shyam Moorjani in the civil writ said these TV channels were owned by parties who were not residents of India and none of them had uplinking facilites within the country. While Zee and Star were telecasting their programmes from Hongkong, Sony had uplinking facility from Singapore, the petition said.

It further alleged that Zee had booked advertisements in the sum of Rs 387.27 crore for the year 1998-99 and Sony had grossed Rs 220 crore for the same year. "It (Sony) has already done an advertisement booking of almost Rs 67 crore for the quarter of 1999-2000," the petition claimed.

It said the News Television India Pvt Ltd and Set IndiaPvt Ltd were only agents for Star and Sony respectively in India and Zee Telefilms Ltd was also performing the same job for Zee TV channel.

"Provision of para 8C.2 of FERA permits the collection of the amount of advertising by these respondents (Indian agents of the foreign channels) only from those exporters who have had an export of not less than Rs 10 lakh in the preceding two years," the petition said.

But these TV channels were advertising products consumed locally, it said adding "the export houses are being made the conduits by advertisers for getting the advertisements."

Indian agents of the TV channels were "transmitting" the revenue earned through advertisements abroad in violation of FERA and Exchange Control Manual, it alleged.