New Delhi, Aug. 22: The Centre has revised the policy for television companies with foreign equity seeking to uplink news channels. STAR Television, whose application for a long-term licence sparked an inquisition and the resultant policy change, will get a month’s time to comply with the new norms.
The cornerstone of the new policy is that the Indian partner in a joint venture television news company with foreign equity must own at least 51 per cent of the shares.
The decision was taken at a meeting chaired by Prime Minister A.B. Vajpayee even as the Parliament session concluded. It was attended by deputy Prime Minister L.K. Advani, law minister Arun Jaitley, finance minister Jaswant Singh, principal secretary to the Prime Minister Brajesh Mishra and I&B secretary Pawan Chopra.
The meeting considered the recommendation of a group of ministers made earlier in the week.
“We have brought the policy on uplinking not only on a par with the guidelines for foreign investment in print media but also taken it beyond that,” I&B minister Ravi Shankar Prasad said while announcing the changes.
The policy lays down that:
• A television news company with foreign equity must have 51 per cent of its equity with a single Indian partner. This will not include equity held by Indian financial institutions
• The single Indian partner can be a resident Indian, a Hindu undivided family or a company or group of companies under the same management and control
• Foreign investment remains capped at 26 per cent
• All appointments of key executive and editorial personnel have to be made by the applicant company without reference to any foreign company
• The applicant company must have complete operational independence over its resources and assets and adequate financial strength to run a news channel. “Adequate financial strength” has not been defined.
• Representation on the board of directors should be proportionate to the shareholding
Prasad said the guidelines for the news and current affairs category in print media will be redefined with additional safeguards but they do not require a change of policy.
For STAR, the new policy means that the application made by its shell company, Media Content and Communication Services (MCCS), has been effectively trashed. In the MCCS’ shareholding pattern, the single largest shareholder is advertising professional Suhel Seth with 30 per cent. Of the rest, STAR holds 26 per cent and a clutch of minority shareholders own 5 to 7 per cent each.
The Centre also found in MCCS’ application that STAR was effectively outsourcing business to other backend companies such as Rent Works and Touch Telecontent who would supply equipment and wherewithal. In the application, government sources said, editorial control was vested with STAR.
Prasad claimed the guidelines “are not STAR-specific”. But it was specified that STAR, which has been operating its news channel with weekly licences and as the beneficiary of a court stay order, will have four weeks from the date the policy is notified.