Media company likely to replace Birla as stakeholder in MCCS

NEW DELHI / MUMBAI: The clock is ticking for the latest uplinking extension given to Star India for its news channel and it runs out Wednesday midnight.

But media talk of a possible shut down of Star News appears to have receded somewhat with some fresh developments tonight.

It is now confirmed that AV Birla Group chairman Aditya Kumaramanglam Birla is selling out his 25 per cent stake in Media Content & Communications Services India Pvt. Ltd (MCCS), the company floated by the Rupert Murdoch company to supply content and uplink it from India for Star News. A replacement has already been lined up though, and it is likely to be a well known media company, an MCCS board member says.

The situation currently is that Birla will stay on board MCCS till such time as a suitable replacement is found. One name already doing the rounds is the Bhartia family. Shobhna Bhartia, daughter of KK Birla, runs Hindustan Times, while her husband's family runs the Vam Organics group. It needs noting that HT editor Vir Sanghvi, with a 5 per cent stake, is one among seven Indian stakeholders presently having equity in MCCS .

Another possible replacement is the Indian Express Group or alternately, group editor-in-chief and CEO Shekhar Gupta in his personal capacity.

MCCS, meanwhile, has still to get back to the government with certain clarifications sought, including those on the shareholding pattern of the company.

The MCCS board member told that as of 8:30 p.m. that the company is "still gathering all the information that the ministry has sought."

The information & broadcasting ministry last week had shot off about 10 questions to MCCS on Star News seeking clarifications on its complex shareholding and ownership pattern, and indicated its willingness to revise the policy on uplinking of foreign news channels from India to ensure compliance with Indian law.

Star News has been given weekly extensions since it applied for uplink permission on 20 June, till such time as the government clears its application. The present week's extension comes to an end Wednesday midnight.

It is learnt that various board members and shareholders of MCCS, including Star India's business development head Kaushal Dalal, ad man Suhel Seth and Hindustan Times editor Vir Sanghvi, had been in meetings today with Star India CEO Peter Mukerjea, whose second home seems to be Delhi these days.

Sources in MCCS, in which Star India is the single largest shareholder with 26 per cent equity stake, also indicated that Mukerjea had been in touch with Birla over phone. It is Birla's imminent exit from the news venture that has upset Star's plans to keep Star News afloat after a five-year content contract with NDTV came to an end on 31 March this year.

But it seems strange that some of the clarifications sought by the government from Star News were based on media reports. The Ministry was compelled to shoot questions amid concerns expressed by Indian broadcasters, who demanded a level-playing field in news operations, and amid rumours of shareholder and chairman of the AV Birla Group, Aditya Kumaramanglam Birla, relinquishing his 25 per cent personal stake in MCCS.

Some of the queries from the government to MCCS are as following: 

*Who is the present owner of Star News channel and who will own it once the company structure is firmed up?

*Even with 26 per cent, Star News Broadcasting Ltd remains a majority shareholder. Explain the division of shares. 

*Do Indian directors have voting rights? 

*What is the total projected investment for the next five years and the source of funding? 

*Please furnish financial statement for the past year's loans proposed to be taken to fund the operations, from Indian/foreign banks. 

*Total cost of operations and number of staff specifically employed for content creation. 

* Who will do the advertising and marketing for the news company?

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