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ARCHIVED - Broadcasting Decision CRTC 2004-316

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Broadcasting Decision CRTC 2004-316

  Ottawa, 5 August 2004
  6087329 Canada Inc.
Donnacona and Sainte-Croix-de-Lotbinière, Quebec
  Application 2003-1886-7
Public Hearing in the National Capital Region
17 May 2004
 

Transfer of assets - Corporate reorganization

  The Commission approves the application by 6087329 Canada Inc. to acquire the assets of the radio programming undertaking CKNU-FM Donnacona and its transmitter CKNU-FM-1 Sainte-Croix-de-Lotbinière.
 

The application

1. The Commission received an application by 6087329 Canada Inc. for authority to acquire the assets of the radio programming undertaking CKNU-FM Donnacona and its transmitter CKNU-FM-1 Sainte-Croix-de-Lotbinière, and for a broadcasting licence to continue the operation of the undertaking and its transmitter.
2. CKNU-FM is currently licensed to Genex Communications Inc. (Genex), a company operated and controlled by Patrice Demers. The applicant proposed an intra-corporate reorganization involving the transfer of the assets of CKNU-FM and CKNU-FM-1 to another company also operated and controlled by Mr. Demers. In the application, the applicant stated that, [TRANSLATION] "since it is an affiliate, the shareholders as well as the management of each of the shareholders is the same as that of Genex Communications Inc., which is the current licensee and former owner of the undertaking in question."
3. The applicant did not propose any benefits in the application. In response to questions regarding tangible benefits, the applicant indicated that the transaction is [TRANSLATION] "in fact a corporate reorganization that does not involve any change in control of the undertaking. ... There is full continuity between the proposed transaction and that approved by the Commission in Decision CRTC 98-502 dated 24 November 1998."
 

Intervention

4. The Commission received an intervention from the Association québécoise de l'industrie du disque, du spectacle et de la vidéo (ADISQ). ADISQ acknowledged that 6087329 Canada Inc. has the same shareholders as Genex, and that the acquisition of the assets by 6087329 Canada Inc. did not appear to involve a change in ultimate control of the station. It stated, however, that the Commission should ensure that there is no ambiguity resulting from this transaction as to the ultimate control of CKNU-FM, so that, when assessing the specific merits of an application, the Commission is able to examine the person filing the application and that person's history as a licensee.
5. The applicant did not reply to the intervention.
 

The Commission's analysis and determination

6. The existing licence was awarded in Acquisition of the assets of CKNU-FM and its transmitter CKNU-FM-1,Decision CRTC 98-502, 24 November 1998 (Decision 98-502), and expires on 31 August 2005.
7. The Commission notes that it has received a number of complaints concerning the content of the programming broadcast by CKNU-FM. Also, in Broadcasting Notice of Public Hearing CRTC 2003-11-2 dated 30 January 2004, the Commission indicated its intention to examine the complaints that had been placed on CKNU-FM's public file alleging that the licensee was acting as the operator of a network without a licence. In light of these allegations, the Commission indicated that the parties might be called upon to show cause why a mandatory order should not be issued pursuant to section 12 of the Broadcasting Act, requiring that they cease broadcasting any and all network programming for which the Commission has not issued a licence.
8. The Commission has considered the ADISQ intervention. Given that the holders of voting shares in Genex will hold the same proportion of voting shares in 6087329 Canada Inc., and that Mr. Demers will continue to act as President and CEO of the licensee, the Commission finds that the subject transaction does not involve a change in the ultimate control of the licensee. Consequently, the Commission approves the application by 6087329 Canada Inc. for authority to acquire the assets of CKNU-FM Donnacona and CKNU-FM-1 Sainte-Croix-de-Lotbinière, and for a broadcasting licence to continue the operation of the undertaking and its transmitter.
9. The Commission will issue a licence to 6087329 Canada Inc. for the remainder of the term of CKNU-FM's licence expiring on 31 August 2005, upon surrender of the current licence to the Commission. The licence will be subject to the same terms and conditions as those in effect under the current licence, as set out in Decision 98-502.
10. Because the ultimate control of the new licensee company, its shareholding and management will be the same as is currently in place, the Commission will examine, at the time of CKNU-FM's next licence renewal, the complaints and concerns that have been raised in the period since Genex was licensed pursuant to Decision 98-502.
11. The Commission notes that the transaction that is the subject of this decision was completed without the prior approval of the Commission. The Commission reminds the licensee that, under the Radio Regulations, 1986, prior approval is required for any transfer of the assets of a licensed undertaking. 
  Secretary General
  This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined at the following Internet site: www.crtc.gc.ca 

Date Modified: 2004-08-05

Date modified: