The Hindu : Grace period for Star News drawing to a close

Online edition of India's National Newspaper
Tuesday, Jun 24, 2003

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Grace period for Star News drawing to a close

By Our Special Correspondent

NEW DELHI JUNE 23. The fate of Star News is once again in question with only three days remaining for the close of the 90-day grace period that the wholly foreign-owned channel had to reduce its foreign equity to 26 per cent, as mandated by the three-month-old uplinking policy for news and current affairs channels.

With Star News having sent in its application to uplink from India in its new incarnate — Media Content and Communications Services — only this past Friday, no one in the Ministry and the industry was willing to hazard a guess as to whether the channel would be able to function as a 24-hour news channel with live transmission after June 26 when the 90-day transitory period ends.

Though Star News has only 26 per cent equity in the newly floated company — set up with an authorised capital of Rs. 5 crore with Rs. 1 lakh as paid up capital — the Ministry is likely to seek a clarification on its shareholding pattern. In fact, Ministry officials find the shareholding pattern — particularly the quantum of paid up capital — questionable. As it is late in submission, Ministry officials are uncertain whether the application can be processed within the next three days even if everything is in order as it also has to go to the Ministries of Home, External Affairs, Finance and Communications besides the Department of Space for clearance.

However, Star News officials were confident that they would not be forced off the air after June 26 as, according to them, the transitory arrangement of the uplinking policy gave them "three months to come within the framework of these guidelines.'' As per the channel's interpretation, application as a new incarnate within the stipulated time was enough though the Ministry maintained that this was subject to clearance within 90 days. After completely liberalising the satellite uplinking policy — closed to private players till 1998 — in 2000, the Government decided to put a 26 per cent cap on foreign equity for news channels in March this year after the Star News became the first wholly foreign-owned news channel to apply for uplinking from India in anticipation of the termination of its contract with content provider, NDTV, in April.

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