Local investors drawn to Star India

Birla reported to have bought large stake

NEW DELHI — India’s wealthiest execs are scrambling for shares in Rupert Murdoch’s Star India after it applied to the government for permission to uplink the Star News channel from India.

Star had been given until Thursday to conform to the foreign direct-investment rule that only 26% equity in a media group can be in foreign hands.

While Star would not reveal the names of interested parties, the Indian media said Kumarmangalam Birla, head of the Birla industrial group that specializes in textiles and cement, had nabbed a 25% stake.

The reports said Birla had paid for the stocks out of his own pocket and it was not a group investment.

The stake is not enough to give Birla veto on decisions, and Murdoch’s company still holds the controlling stake.

Others named as new shareholders include Merrill Lynch’s Hemendra Kothari, actor-turned-producer Jitendra Kapoor of Balaji Telefilms and TV personality Vir Sanghvi.

Star contracted out its 24-hour news channel to private web New Delhi Television until February, but when the contract ended both companies launched their own news services.

The news program produced by NDTV had been sent electronically to Hong Kong, where it was uplinked and transmitted via satellite back to India.

Under new government policy, only Indian companies may access direct uplinking, which is crucial for TV news channels as it allows instant coverage of events.