The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A radio station controlled by Sebas Bastian’s Brickell Management Group (BMG) is broadcasting using a licence that was “voided” by the sector’s regulator, the Court of Appeal found yesterday.

Justice Stella Crane-Scott, in a unanimous verdict backed by her two fellow appeal judges, slammed the Utilities Regulation and Competition Authority (URCA) over how the licence for the 103.5 FM radio spectrum was transferred to a company that is 51 percent majority controlled by BMG’s corporate vehicle, Neman Networks Ltd.

Noting that URCA had itself admitted the licence, originally granted to Olympic triple jump medallist Frank Rutherford and the late Phil Smith, was non-compliant with the law because it had been issued in the name of individuals rather than a corporate entity as mandated by the Communications Act, Justice Crane-Scott said the process had denied “natural justice” to a rival ownership claimant.

She cited Navette Broadcasting and Entertainment Company’s “good prospects of success” as a critical factor in her decision to give the company an extra 14 days to file its appeal over a Supreme Court’s decision denying it permission to bring Judicial Review proceedings against URCA over the 103.5 FM licence’s transfer.

Justice Crane-Scott said the dispute revolves around whether Navette, or Messrs Rutherford and Smith, were the original owners of the 103.5 FM spectrum licence. The latter duo were granted conditional approval by URCA’s predecessor, the Public Utilities Commission (PUC), for a broadcast licence to operate an FM radio station covering New Providence in February 2007.

The Communications Act’s introduction in 2009 resulted in a revised application that named Mr Rutherford as the applicant, Mr Ferguson as the contact person, and Navette as the applicant’s address. The necessary spectrum and class operating licences were duly issued in January 2010, and ZSR Sports Radio continued using the 103.5 FM frequency.

URCA’s argument is that Mr Smith’s wife and Mr Rutherford are the licence co-owners, and that Navette was only operating the station on their behalf without an equity interest. However, Navette’s position is this could never be as the Communications Act mandates that all licences had to be issued to corporate entities such as itself.

In particular, Navette is pointing to language in the licence that states it was issued to “Messrs Frank Rutherford and Phillip Smith for Navette Broadcasting & Entertainment” as a clear indication that it is the true licence owner URCA issued the relevant permissions to it in compliance with the Act.

Justice Crane-Scott said the ownership dispute was ultimately triggered by the February 14, 2017, “change of control” application submitted by Brickell Management Group on behalf of its Neman Networks affiliate and Mr Rutherford/Mrs Smith.

This proposed transferring ownership of the 103.5 FM licence to another entity, Paramount Systems, which would be 51 percent majority-owned by Neman Networks. Mr Rutherford and Mrs Smith would retain a minority 49 percent interest.

Despite Navette’s representations, URCA revealed its decision to re-issue the licence to Paramount Systems on June 15, 2017. It also confirmed its previous position, stated in a June 15, 2009, that the original licence was “void” because it breached the Communications Act.

“That being so....., URCA had no jurisdiction to entertain the change of control application from the Brickell Management Group since a ‘void’ licence was incapable of amendment or variation as URCA subsequently purported to do,” appeal justice Crane-Scott ruled.

“Even assuming the correctness of URCA’s assertions, it appears to us that upon discovery of its erroneous grant in 2010 of a ‘void’ licence to Messrs Rutherford and Smith in breach of the Act, the proper course which URCA ought to have taken was to refuse the change of control application submitted by the Brickell Management Group and to notify all relevant parties (including Navette) of its intention to treat the licence as ‘void’ and thereafter invite submissions on its intended course of action.

“Instead, without notifying either Frank Rutherford, Blossie Smith or Navette of its intention to treat the licence as ‘void’, URCA simply sought comments on the proposed change of ownership application and, thereafter, unilaterally amended/varied ownership and control of the licence, effectively transferring a ‘void’ licence to Paramount Systems.”

The licence, and 103.5 FM frequency, have subsequently been used by Paramount Systems to launch The Beat radio station, which broadcasts from the same complex as Island Luck TV (cable channel 224) located at the Thompson Boulevard/JFK Drive roundabout. The Beat’s on-air talent includes well-known social activist, Rodney Moncur, and his Freedom March show that is also a regular on channel 224.

Mr Bastian, who is also the Island Luck web shop chain’s principal, yesterday told Tribune Business he was neither a shareholder nor director of Paramount Systems when contacted for comment on the Court of Appeal ruling. Yet he promised to ask Alfred Sears QC, the former attorney general, to call this newspaper in his capacity as Paramount’s legal representative.

Mr Sears, who also acts for Island Luck and Adrian Fox, the business partner who worked with Mr Bastian to make it the dominant web shop chain in The Bahamas, said he would review the Court of Appeal ruling before advising Paramount Systems on the legal options available to it.

While Navette’s action is at an early stage, and the legal skirmishes over its Judicial Review bid preliminary to-date, Mr Sears added that “obviously our client is an interested party”. Should there be a substantive hearing on the case’s merits, he added that “certainly our client will have the right to join and seek leave to intervene, and have their arguments heard”.

Appeal justice Crane-Scott, meanwhile, said URCA should not seek to argue that Paramount Systems’ rights will be prejudiced should Navette get extra time to file its appeal. “URCA declared Navette’s license ‘void’ but subsequent thereto granted the ‘void’ license to a third party,” she ruled.

Regardless of whether Navette owned the 103.5 FM licence, or was just its mere operator, appeal justice Crane-Scott added: “Navette was clearly a legal entity likely to be adversely affected by URCA’s decision to treat the licence as ‘void’.

“Natural justice required that it ought to have been notified of URCA’s decision to treat the 2010 licence as ‘void’, and to be heard on that issue before any action adverse to it was taken. It goes without saying that Navette would undoubtedly have had the necessary standing to commence judicial review proceedings to vindicate its position.”

Ruling that Navette “has a good prospect of success on appeal”, she added that Navette felt it had been “deprived of its broadcasting licence”. Appeal justice Crane-Scott continued: “Navette alleges that URCA has unlawfully taken the licence under which it operated and given it instead to a third party, Paramount Systems Ltd, effectively shutting down its business.

“In a related complaint, Navette further claims that following the re-issuance of the licence, URCA subsequently seized its broadcasting equipment and continues unlawfully to retain possession of the same.”

Vann Ferguson, Navette’s president, yesterday told Tribune Business he was “afraid to celebrate” the Court of Appeal’s verdict, but described himself as “elated” after the company’s attorney, Khalil Parker, informed him of the decision.

Revealing that he had been “walking on egg shells” in relation to Navette’s court battle, Mr Ferguson said all he wanted was for the merits of his case “to be heard” after running into multiple legal technicalities and procedural obstacles to-date.

“It’s been such an up and down experience for the past two years,” he revealed. “We have never been heard. We need to get heard, and that’s what I’m trusting will happen this time around. I won’t celebrate. I’m hoping the process will at least go forward and be heard.

“That’s all we wanted. We wanted the substantive case to be heard. Once that happens we will be comfortable going forward. At least we’ll feel some form of justification that justice has been served.

“Our case has always been around the issue of a void licence. If you voided it, what is that? You cannot issue a void licence. There are so many other technicalities the legal team are discussing that they cannot believe went as far as it did. That’s all we ask. We now get a chance to hear what really went on.”

Given the URCA’s “self-imposed” moratorium on issuing further New Providence radio licences, given that the market was over-saturated, Mr Ferguson argued that URCA seemed to have gone beyond the call of duty to find an existing one that Brickell Management Group could take over.

“We were the weakest link,” he added. “I guess they pushed on us.”