Star seeks more time to meet equity norms

The government had given Star News time until September 28 to rework the shareholding pattern, which raised several questions on real management control.

"Star has intimated to the government that if it is not able to work out the structure of the new company by the stipulated deadline, it would require and extension. We are yet to take a view on the issue," said an information and broadcasting ministry official. However, the company is yet to send in an official 'written' communication.

The move by the company comes at a time when Star is in talks with a host of Indian companies to finalise a partner who would hold the dominant equity stake in the company.

Industry sources said that not only has Star been unable to clinch a deal with the prospective local partner, it is yet to sort out the issues related to the exit of its existing joint venture partner, adman Suhel Seth. Seth, on his part, declined to comment on the ongoing decisions.

"I have informed my decision to Star," he said. The government amended the news channel up-linking policy in August this year by incorporating the clause of a dominant Indian partner. The earlier guidelines stipulated only a 26 per cent equity cap without any riders for a news channel company.

Star had set up a company called Media Content and Communication Services (MCCS) to meet the guidelines with a number of Indian shareholders.

The Indian shareholders of MCCS are advertising professional Suhel Seth, who owns 30 per cent, Hemendra Kothari with 25 per cent stake, Vir Sanghvi with 5 per cent stake,Rajan Karanjiwala with 4 per cent stake, Maya Alagh with 5 per cent and Jeetendra Kapoor also with 5 per cent stake.

But the government found loopholes in the structure of the company and thought that it is flouting the spirit of the regulations. The government had subsequently decided to amend the news channel up-linking norms to make them more stringent.