Finance ministry finds flaws with Space TV's DTH application; approves expansion plans for DD

NEW DELHI: If the news channel was not enough of a pain for Star, the government today admitted in Parliament that Space TV's application for direct-to-home television service was construed to be not in order by the finance ministry. But it also justified an invitation to Space TV for DTH.

However, as the interpretation of the guidelines was left to the information and broadcasting ministry, it took its own stand while issuing a letter of invitation to Space TV on an application for a DTH license.

Political critics had questioned the I&B ministry's propriety and integrity while issuing a letter of invitation to Space TV though the finance ministry had clearly stated that the equity structure of the company was not as per the set guidelines.

Space TV is a company that was formed in 2001 wherein two employees of Star India are shareholders and also directors on the board of the company. Still, the government today said that the licence for a DTH service would be issued only when an applicant company, including Space TV, has fully complied with the eligibility criteria with respect to foreign equity holding as laid down in the guidelines of March 2001, as also other terms and conditions necessary for such a grant.

Replying to a question by V Vetriselvan in Lok Sabha (Lower House of Indian Parliament) today, information and broadcasting minister Ravi Shankar Prasad said that the finance ministry has clarified, through its letter dated 17 January 2003, that the present equity of Space TV contributed by two employees of Star India cannot be treated as domestic share-holding as the funding for this equity contribution has been raised through bank finance in India, against the security deposit of Rs 100 million made by Star.

The government also said that the finance ministry, while leaving it to the I&B ministry to interpret its own guidelines, had stated that DTH guidelines do not make a distinction between stages of 'Letter of Intent' or issue of a licence or post licence operations for applying eligibility criteria on the limit of foreign equity holding.

In his ministry's defence, Prasad pointed out to fellow parliamentarians that the home affairs ministry had cleared Space TV and its directors, including the chief executive, from the security point of view.

As per government data, Space TV Pvt. Ltd. was incorporated on 9 January 2001. G Jagdish Kumar and Ajay K Sharma are the promoters and G Subramanian is the CEO of the firm. All three are presently working with Star India Pvt. Ltd. in different capacities. The head office and regional office addresses of Space TV belong to Star India Pvt. Ltd.

Justifying his ministry's letter to Space TV, Prasad said in view of the above, I&B ministry has asked Space TV to pay non-refundable entry fee of Rs 100 million to enable the ministry to issue Letter of Intent, subject to its furnishing an affidavit that it has fulfilled certain conditions.


A special package for expansion/improvement of Doordarshan service in the Northeast region and in the Islands of Andaman & Nicobar and Lakshadweep has been approved in principle by the government. Two very low power transmitters (VLPTs) at Swarajgram and Kalighat were commissioned in Andaman & Nicobar Islands during 2002-2003.

Replying to a question by Bishnu Pada Ray in Lok Sabha today, Prasad said that the scheme of installation of 10 KV FM radio transmitters with studio facility has been proposed for Port Blair in the 10th Five-Year Plan, for which an amount of Rs 57 million has been allocated.

Under the Software Plan Scheme in the 10th Five Year Plan, an amount of Rs 400,000 was allocated to the All India Radio Port Blair, during the financial year 2002-2003. An amount of Rs 150,000 has been allocated to the deputy director-general (South Zone) during the current financial year under Software Plan Scheme, which includes provision for AIR, Port Blair as well.

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