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Plan has Indian gov’t Star-gazing

Officials could deny Murdoch uplink facilities from India

NEW DELHI — The Indian government has asked Rupert Murdoch’s Star TV to explain the equity structure of its new 24-hour news channel amid concerns that it is flouting the foreign investment cap.

In April, the Cabinet limited foreign investment in news channels to 26% and gave Hong Kong-based Star three months to bring its equity in Star News down from 49%.

Last month Star distributed 74% of the equity in its uplinking firm Media Content & Communications Services (MCCS) among seven individuals. One, cement tycoon Kumar Mangalam Birla, is reported to have already sold his 25% holding to an undisclosed buyer. Hemendra Kothari, who owns another 25%, is Star’s merchant banker.

Except for a 5% holding in the hands of Balaji Telefilms, the rest has been distributed among professionals close to Star.

“Star will not be allowed to control the new media company by taking refuge under a fuzzy equity structure,” a government official told the Economic Times newspaper. “While it is technically meeting India’s norms, it is actually defeating the purpose by effectively holding control of MCCS.”

The government could deny Star News uplink facilities from India. Under the new media policy, only Indian companies may access direct uplinking, which is crucial for news channels as it allows for instant coverage of events.

Star had earlier sought permission to launch its own service and directly uplink via satellite from India.

Meanwhile, Prannoy Roy-backed news and entertainment network New Delhi Television (NDTV) is gearing up its Hindi news channel programming.

It has pacted with Standard Chartered Private Equity, the global private equity arm of Singapore-based Standard Chartered Bank, for an $11 million cash transfusion.

The Delhi-based company went independent in April this year after its five-year contract with Star TV India to provide news content expired in March. NDTV airs two news channels in English and Hindi.

(Arti Mathur in New Delhi contributed to this report).

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