Report on Shemaroo

Defence ministry moots 26% FDI cap for news channels

NEW DELHI: The ministry of defence, under minister George Fernandes, is understood to have suggested that foreign shareholding in a news channel should be capped at 26 per cent in a response to a Cabinet note on the news channels' uplinking circulated by the information and broadcasting ministry.

It is interesting to note that the defence ministry's observations on the uplinking issue comes close on the heels of Fernandes' staunch opposition to the government stand on disinvestment. Fernandes is on record as saying disinvestment "should be done carefully".

According to government sources that spoke to today, the feedback from various government departments and ministries on the uplinking issue is that 100 per cent FDI in news channel should not be allowed. The Star News issue has also not been listed yet for a Cabinet meet that is generally held on Tuesdays.

While the telecommunication ministry has observed that a 49 per cent FDI in news channels is okay (consistent with the FDI cap in telecom infrastructure segment), the ministries of home and external affairs have recommended "reasonable restrictions."

It is also learnt that the I&B ministry, under Sushma Swaraj whose brainchild it was to take the issue to the Cabinet after Star filed for uplinking permission for Star News last year, had prepared an internal note representing the ministry's viewpoint which had envisaged capping the FDI news channels at par with the norms set by the government in the print medium for the news category.

The big question is: what would be the stand of the new I&B minister Ravi Shankar Prasad? He hasn't yet spoken his mind on the issue, but he did give a hint to indiantelevision in an interview that the Star News/uplinking issue is "commanding" his attention and that all options are being looked into. That includes giving provisional permission to Star for the news channel subject to the condition that the company would abide by all future policy decisions on the matter. Prasad said this in response to a question whether giving provisional permission to Star is an option being considered by his ministry.

However, he had also reiterated his predecessor's stand that the guidance of the Cabinet would be sought on the matter.

Meanwhile, if the government caps FDI in news channels at 26 per cent, then other broadcasters too, would be put to inconvenience and would have to undertake corporate restructuring. A case in point is Zee Telefilms where if Zee News' shareholding control has to be 74 per cent Indian, then NRI promoter Subhash Chandra would have to do some restructuring.

If the 26 per cent cap is effected, then TV Today Network, that has said it may offload some more equity to outsiders, will not have much to offload as it has already offloaded about 16 per cent to various parties, including Bharti, an Indian company where foreign companies like Singapore Telecom hold stakes.

CNBC India, a joint venture between Television Eighteen Ltd and CNBC Asia, may also have to opt for some restructuring.

"In effect, if the government caps FDI in news channels at 26 per cent, then various companies would have to go in for corporate restructuring which may be time consuming," a media analyst said.

The Virgin Island-based Star News Broadcasting had sought the government's nod in October last year to uplink Star News channel that had been interpreted in the government circles as 100 per cent foreign ownership of a news channel from the country.

Star is getting ready to put in place a news team and other infrastructure. Industry sources also say that some Indian corporates have evinced interest in forming a joint venture with Star in case government restrictions come in.

Latest Reads
5 Steps to Send a Press Release to Journalists

You have managed to write a great press release about your business or a new product you are planning to launch. Well done! Press releases are a great device to promote your products/services and increase brand awareness. However, what’s the point in writing an incredible press release if there’s...

Resources Education
Guest column: Fogg and the science of instilling behavioural change

DELHI: Change can be easy and fun. Tiny is mighty at least when it comes to change. Almost all of us want to make some change in our lives – eat better, live healthier, be better parents etc. but there is a painful gap between what people want and what they actually do. There is a disconnect...

Resources Education
Choosing a good press release distribution service

Press release distribution is a collection of services that make your marketing easier. You can develop professional press releases intended for a larger targeted audience. You can post them on multiple sources, platforms too like blogs, online channels, and social networks. Based on who and what...

Resources Education
Stuck with Rs. 1 Crore Life Cover? You Need to Know This

Life insurance has become a necessity in life, especially during the COVID19 pandemic. Keeping that in mind, people rush towards the nearest insurance company’s office or look for suitable types of insurance plans online. In any case, if there is one thing that almost every such individual witness...

Resources Education
What's the tax for online gambling?

As the deadline for filing income tax returns in India looms closer, many people are rushing to file their ITRs this month.

Resources Education
How to Make Your Eyeshadow Last All Day

Want to know the secret of making your eye shadow last all day long? Then this blog is for you.

Resources Education
Shamoly Khera’s Bedazzle helps people to master the art of self-confidence

Shamoly Khera a multi-faceted speaker, a TV presenter, producer, public speaker and speaking coach who has made her mark in the Indian media and TV industry.

Resources Education
Guest column: The manifold benefits of reading

The more that you read, the more things you will know. The more that you learn, the more places you’ll go.” —Dr Seuss. The above quote is so true.

Resources Education
10 Most Stylish Beards From Movies

In the latest years, people tend to take as a lifestyle example actors from different movies they like. Maybe a woman wants to dress like her favourite actress, or a man wants to drive the same car as his favourite race driver from movies. In this article, we’re gonna show you 15 most stylish...

Resources Education

Sign up for our Newsletter

subscribe for latest stories

* indicates required