TN politicos begin shadowboxing; target biz firms

With the Assembly elections in Tamil Nadu round the corner, some of last week's developments moved to an area where the main political parties have accused each other of targeting some business ventures to achieve political ends.

Considering the current political scenario in Tamil Nadu, last week's developments seem like shadowboxing before the big fight.

Following the Income Tax department raids during the middle of the week on Midas Golden Distilleries and people linked with it, Tamil Nadu Chief Minister J Jayalalithaa has accused the Opposition party DMK of abusing its proximity with the central government to harass people associated with her.

As the week drew to a close, the AIADMK government on Saturday introduced a Bill in the Assembly that aims to control the cable distribution network. The main target of the Bill is the state's largest multi-system operator (MSO), Sumangali Cable Vision, controlled by Kalanidhi Maran, brother of DMK's Union Communication and IT minister Dayanidhi Maran.

TAX DEPARTMENT'S PRESS CONFERENCE
On Friday evening, Chief Commissioner of Income Tax in Chennai, Santosh Datta, addressed a press conference to explain the raid at Midas Distilleries, one of the directors of which is Jayalalithaa's doctor.

The press conference was unusual as Datta was accompanied by DMK's S S Palanimanikam, Union minister of State for Finance. Palanimanikam said that some of the journalists had requested him to attend the conference to clarify matters.

The raid on Midas seemed a typical tax case. The department was suspicious that the company, a big supplier to the state government's liquor vending arm TASMAC, had overstated its expenses and avoided taxes. The department also wanted to check investments made by the company and into it.

Datta pointed out that the key outcome of the raids was the seizure of documents relating to investments. At the time of the press conference, the department was yet to thoroughly investigate the trail arising out of the documents.

The questions raised at the conference, however, centred around two themes: whether the department was pressurised into raiding Midas and whether the seized documents contained the name of a close associate of Jayalalithaa.

Both Datta and Palanimanikam denied that the department was pressurised by the Centre. Datta also said that documents did not contain the name of Jayalalithaa's associate.

CABLE DISTRIBUTION BILL
On Saturday, the AIADMK government introduced a bill "� Tamil Nadu Acquisition, Transfer and Taking Over of Cable Television Network (including multiple service optical transport system) Bill, 2006 "� which aims to take over two MSOs. MSOs are the link that ground level cable operators use to reach the end-customer.

The Bill explicitly names two MSOs, SCV and Rajan Raheja group's Hathway, as the ones which would be taken over. Of the two, Kalanidhi Maran's SCV has a dominant presence in the state. It is believed to have 85 per cent control of the Chennai market and the rest of the state.

DMK members, including Union Communication Minister Dayanidhi Maran, met Tamil Nadu governor S S Barnala on the same day to lodge their protest. The Bill would have to be placed before the governor for his assent at a later stage.

The AIADMK government has said that the Bill has been introduced in public interest and that it intends to keep other MSOs out of its purview. Hathway officials declined to comment on the bill, while SCV officials could not be contacted.

The state government's purview in the matter is open to question. Cable TV industry officials said that the industry falls under the purview of the Union government. The AIADMK government had, a few years ago, unsuccessfully tried to control the cable TV industry through a similar Bill.