The network insists that its plans are on track for the four-part series, Bollywood Star, to be screened later this year.
The winner of the series, which follows the aspirations of second and third generation British Asians who yearn for a film
career in Bollywood, is guaranteed a role in a forthcoming Bollywood production.
Channel Four's Lycette Cohen told rediff.com, "Yes, Karan Johar has pulled out of the project for personal reasons.
I understand his father is not well. We do have another Bollywood producer in place. This is somebody who is equally just as big a name.
"As far as we are concerned, the project is still going ahead, we are very happy with it. There are four programmes and the last two will be following the possible winners to Bombay [now Mumbai].
"It will be about the process they go through over there, their dancing and singing skills, but it is also quite documentary because its about why second and third generation Asians have their aspirations based on Bollywood.
"The winner of Bollywood Star -- and there could be two winners -- will be given a part in a Bollywood film. It is an absolutely guaranteed
part. Just because Karan Johar has withdrawn doesn't mean it won't go ahead."
Following Johar's withdrawal, there was speculation that the series could be axed and critical comments from film experts, who have questioned the competence of the judging panel selected by Channel Four.
They include UK radio DJ Bobby Friction, music producer Bally Sagoo, local actress Sophia Haque and dancing instructor Honey Kalaria.
Film producer Vashu Bhagnani was quoted in the UK ethnic media last week as saying, "Having judges that are not from the film industry not only harms the credibility of the show, it also harms those taking part because they are given the wrong guidance.
"Those who are not connected to the film industry will give false hope to those taking part and possibly destroying the confidence of someone that is a genuine star."
One frustrated contestant said, "I am not happy with the judges, they made me feel useless and silly." Another was cited as saying, "These judges don't have a Bollywood success story between them."
But Channel Four insiders have shrugged off the criticism of Bollywood Star, which is loosely based on ITV's talent search competition Pop Idol, saying their show has attracted applications from some 800 film star wannabes.
A short list of 22 finalists will perform before a live audience this week end when they will be judged on a dance routine, an acting skit and a speech on why they believe they should be selected for a Bollywood career.