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Suhel Seth buys Birla stake, STAR gets a week

New Delhi, July 16: Suhel Seth of Equus Advertising has bought Kumaramangalam Birla’s 25 per cent stake in a Murdoch shell company, enabling STAR News to win another week’s extension from the Centre to uplink live for its channel.

Seth is now the single largest shareholder in Media Content and Communication Services (MCCS) with a 30 per cent holding. Apart from Seth’s holding going up six-fold over his original 5 per cent stake, the shares of the others remain what they were: STAR News Broadcasting continues to hold 26 per cent according to the cap on Foreign Direct Investment stipulated by the Centre, financier Hemendra Kothari holds 25 per cent, newspaper editor Vir Sanghvi, actor Jeetendra and occasional television personality Maya Alagh hold 5 per cent each and lawyer Raian Karanjawala holds 4 per cent.

STAR emissary Kaushal Dalal handed over to the information and broadcasting ministry this afternoon the company’s response to the questions sought by the government last week. “We have replied to all the questions raised by the government,” Dalal, who is the business development head of STAR, said. Dalal is also on the board of directors of MCCS.

The government had last week decided to amend the rules governing foreign investment in television news companies and had shot off missives to the Murdoch company asking questions on its business projections and ownership credentials

In a parallel development, STAR sources claimed in Mumbai that they had got an anticipatory stay order from the court that asked telecom utility VSNL not to snap uplinking facilities. The sources said the stay was granted on July 2 till July 23 on the condition that VSNL can appeal for its vacation following instructions from the Centre.

Ministry sources said STAR’s responses “were adequate if not entirely satisfactory” and it can continue to uplink for the time being. STAR representatives are expected to meet I&B officials tomorrow with more explanations.

Withdrawal of uplinking facility to STAR does not mean that its news channel goes on the blink. Such an eventuality will prevent the channel from live broadcasts. The previous extension was to run out by midnight Wednesday-Thursday but STAR now has at least a week’s reprieve during which the government will “study” its application.

The examination of the application will be mostly on the question of control and not merely on equity. “Our focus is on sources of funds, sources of content and representation on the board,” one official said.

A first reading of the papers submitted by STAR has led ministry officials to the conclusion that STAR was running its news channel “by a veritable alphabet soup of companies”.

The papers say that MCCS will be the content provider to the channel and will use the “STAR News” trademark licensed to it. Infrastructure such as news gathering equipment will be sourced to MCCS from Touch Telecontent — another company in which STAR has a substantial holding. There are separate Newscorp entities such as STAR News Broadcasting and STAR India Broadcasting that hold stakes in other companies to which MCCS will outsource business.

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