McKenzie Wark on Sat, 24 Apr 1999 18:48:23 +0200 (CEST)

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<nettime> Murdoch's Indian Trial

Sydney Morning Herald

Saturday, April 24, 1999


Siege of the Mogul empire

IN A cramped office, in one of the Indian capital's less
salubrious neighbourhoods, an anonymous criminal lawyer
works into the night on a case that may make him a
household name.

Anil Goel's clean-cut, boyish features would be more at
home in the pages of a John Grisham novel than in this
yellowing room with its daunting overflow of mouldy manilla
folders piling onto the floors.

But neither the growl and quack of passing motor rickshaws,
the lowing of cows, nor the occasional fetid gust of breeze
from the slum outside can distract the 30-year-old
advocate's attention from what has become a David and
Goliath legal battle against one of the world's most
powerful men.

Obscenity. The word seems to bounce off the dusty copies of
the Companies Act that stare down grimly from their shelves
at Arun Anil & Associates, the firm that persuaded an
Indian court to issue an arrest warrant for the global
media mogul Rupert Murdoch.

On Christmas Eve 1996, Goel, representing his university
batch-mate and legal partner, Arun Aggarwal, argued before
the Chief Metropolitan Magistrate of Delhi that broadcasts
by Murdoch's Asian satellite television company were
"sweet-poisoning" Indian youth and undermining the extended

"I was up late one night when a film by the name of
Stripped to Kill was shown. It was about the violent demise
of a nude cabaret dancer. I was shocked," Goel recalled in
a recent interview with the Herald.

"The next morning at the office I mentioned it to my
partner, Arun Aggarwal, and he also was concerned about
this violent, sexually explicit material. So we decided to
do something about it."

The first shot across the bow of Satellite Television Asia
Region Ltd (Star TV) was a 26-page complaint laboriously
prepared on a manual typewriter, alleging that the
broadcasts were creating a rise in sex crimes and
destroying the already fragile status of Indian women.

"The programs are repulsive, filthy, loathsome, indecent,
lewd and scurrilous," the complaint read. "We will have the
impressionable youth of India believing that it is
permissible to walk around naked as shown on Star Plus

Not for the first time in his career, Murdoch was accused
of undermining social standards and values in the pursuit
of profit. This time, under the Indian Penal Code and
Indecent Representation of Women (Prohibition) Act, he
faced up to five years' imprisonment if the court found
movies such as Big Bad Mama and Jigsaw Murders aired in
November 1996 were obscene, and that he was responsible for
broadcasting them.

But as the case slow-marched its way through India's
labyrinthine court system, Murdoch remained aloof.
Summonses served at his US and Australian addresses were
returned. His lieutenants in India did everything they
could to protect their boss, even offering themselves to
the court in his place.

But such tactics proved counterproductive. The Chief
Metropolitan Magistrate of Delhi, Prem Kumar, ordered that
a list of the assets of Murdoch's Indian interests be
prepared. The Indian courts have the power to seize assets
of accused persons who fail to appear before them.

The next step is as close as a newspaper advertisement
away. The court has issued a notice declaring Murdoch a
"proclaimed offender", and has given Goel and Aggarwal
until June26 to publish the notice in an American

Once the notice is published, the News Corporation chief
will have 30 days to appear in court, or face arrest should
he ever set foot in India, a country that he believes will
be one of the driving forces in media in the 21st century.

It seems absurd to Star officials that a country that
produces hundreds of films every year featuring highly
suggestive dance sequences and enormous amounts of
slapping, punching, shooting, strangulation, burning and
stabbing, should object to the imported alternative.

Nevertheless, they have engaged some of India's best legal
minds to represent them in the case. In January, Goel was
invited to a meeting with Murdoch's lawyers, who asked him
to drop their client's name from the proceedings.

"They said Mr Murdoch is not at all involved in the
business of Star movies and offered that some responsible
person from the company would appear in his place," Goel
says. "We haven't heard from them since. Unless some
serious proposal is made by their side which ensures that
the offence cannot be repeated, we will proceed with the

With a protracted legal battle looming, Star management
refused requests from the Herald to comment on the case,
but Rathikant Basu, Murdoch's top man in India, rejects the
charge of obscenity.

"In India, satellite broadcasters have shown an amazing
degree of responsibility," he said. "So far there has been
no regulation of content, and there hasn't been any really
major breach of what you might call the social and moral
codes pertaining to the country."

Privately, Star officials play down the importance of the
case, suggesting it is a put-up job by business rivals.
Compared with their main problem - the company's inability
for the past eight years to make a profit - the case of
Aggarwal v Murdoch is indeed small beer.

In the heady days of the early '90s, Murdoch bought into
Star at an estimated cost of $US871million ($1.34billion),
and has since poured in hundreds of millions more to stay
ahead of the Asian TV pack. But despite an estimated
260million viewers in 53 countries, advertisers still
prefer the much larger audiences of state-run television.
India's national broadcaster, Doordarshan, boasts an
audience of 330million viewers, triple that of the
satellite broadcasters in that country.

The other revenue stream - subscriptions - has been
undermined by huge understating of their customer bases by
India's 60,000 "cable wallahs", the middlemen who pay for
the decoders required to receive the encrypted signal, and
then distribute the service via cable in their
neighbourhood. Star management admits the company still
collects only about half the subscriptions that are
rightfully its, and a new 24-hour news channel for India is
hemorrhaging cash.

The extent of the losses depends on whom you ask, and how
you define a loss. One researcher who has studied the
operation puts them at $US250million since 1994, not
counting the acquisition cost. Other observers put the
losses much higher.

India still accounts for just 1per cent of News Corp's
global business, but frantic efforts are under way to
relaunch Star, the corporation's ugly duckling, in a new
form that extracts more rupees from the Indian public.

Direct-to-home (DTH) broadcasting - which uses miniaturised
dishes similar to Murdoch's successful ventures in Japan
and Europe - is the great hope.

But everywhere he turns, Murdoch confronts hurdles. DTH has
been awaiting the government green light for more than two
years. Idle satellite transponders, and other overheads
including 150 staff, are costing the firm more than
$US20million a year.

Having failed in a legal challenge to India's ban on
broadcasting on the Ku-band, which DTH uses, the company
began wooing the controversial Hindu-nationalist Bharatiya
Janata Party (BJP), leader of India's then coalition

Earlier this year, Star officials met the Information and
Broadcasting Minister and BJP heavyweight, Pramod Mahajan,
and offered to provide facilities at their central
subscription management centre in New Delhi for
round-the-clock monitoring of all DTH channels. They
stressed, well-informed sources say, that their new system
would allow the Government at the flick of a switch to
black out broadcasts it objected to.

In the words of one observer, "it was like giving a poacher
the keys to a national park".

When he entered the transnational television business in
1993, Murdoch boldly described the medium as a threat to
"totalitarian regimes everywhere".

Suitably warned, China restricted the use of satellite
dishes, and to this day satellite television there is
officially available only in expatriate housing colonies
and hotels. By 1994, Star was seen as trying to curry
favour with China when it dropped the highly regarded - but
to Beijing often irksome - BBC World channel from the
package available in Hong Kong and China.

India may be a democracy, but here, too, profit comes

"It is much easier to monitor a single DTH operator than
50,000 cable operators," Basu confirms. "When satellite
television first came it was transnational broadcasting,
with all countries receiving the same product. But as time
went on, and programming got focused to markets, then I
think the countries which receive the signals have a right
to legislate at least on the services, because not only are
beams getting more specific to different markets, but
advertising revenues are also being collected from the same

That argument was music to the ear of Mahajan, who since
becoming minister last December had rolled back the
autonomy granted to the national broadcaster by previous
governments. Soon, the Indian press was peppered with
quotes from the minister extolling the virtues of DTH.

Yet again, however, the fates have conspired to make
Murdoch's passage to India a bumpy one. The BJP-led
government fell on April17, and the Murdoch lobbying effort
is back to square one.

But the saga has left a sour taste in the mouth of Dr N.
Bhaskara Rao, director of the Centre for Media Studies in
New Delhi, and a pioneer of Indian television.

He points to a landmark decision of the Supreme Court of
India in February 1997 which ruled that the airwaves
belonged to the public and should be regulated by an
independent authority, not the government of the day.

"Star circumvents that judgment, when it seeks to sell the
Government the line that it will enjoy more control of the
airwaves if it allows DTH, which Star just happens to enjoy
a strategic advantage in," Bhaskara Rao says. "Both Star
and the BJP Government were proceeding with unseemly haste.
The public has become deeply suspicious."

According to Rathikant Basu - a former senior bureaucrat
whose monthly government salary of $520 soared when he
joined Star - Murdoch is still "very bullish" on India.

"He believes the future in Asia is India and China," he
says. Whatever its critics might say, Star has
revolutionised Asian viewing habits. Already broadcasting
in Hindi and English, the company has signed with the South
Indian private channel SUN-TV to begin broadcasting in
Tamil, with Bengali and other regional languages following

About one in three Indian households has a television set,
but this ratio is expected to double in the next 20 years.
The penetration of cable will grow even faster than that,
to 85per cent of all TV households by 2020, on current

The advent of satellite television unleashed an
unprecedented wave of creative talent, freed from the
constraints of stultifying government control. Now India
has caught up with the trend and is pushing ahead with the
development of export processing zones to produce the
250,000 hours of programming that the Asian satellite
channels will require in the next 20 years.

Being first out of the box has often been crucial to
Murdoch's success. But in India he is being restrained, not
just by government and critics, but by his principal
business partner, a former commodities trader and head of
Zee Telefilms, Subhash Chandra Goel.

Goel - whose Zee Telefilms is the only profitable arm of
Star - sees Murdoch's DTH push as an attempt to marginalise
him, and has been using his influence in high places to
delay a decision until he is ready to compete on the new
playing field.

Back at the firm of Arun Anil & Associates, they are
bracing for the next round of legal hostilities.

The complainant, Aggarwal, thinks it will take years before
the case reaches a conclusion, but his lawyer and friend
Anil Goel feels the action has already given Murdoch a
wake-up call and forced Star to cease broadcasting lurid

"Criminal law requires the presence of the accused. The
court will make him appear," he insists.

Besieged by friends and foes alike, and with rapid
technological change punishing his vision, Rupert Murdoch
may well ask whether he will ever find the pot of gold at
the end of Asia's television rainbow.

[reproduced with permission]

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