Murdoch's SpaceTV gets weak govt signal

The government has raised questions about the proposed Rs 1,600 crore (Rs 16 billion) investments by Space TV, the direct-to-home broadcasting joint venture between Rupert Murdoch's Star and Tata Sons.

According to government officials, the government wants to know the details of the proposed investments by the company.

Sources said the government wanted to know the source of funds and how the investments were proposed to be routed.

"There are certain areas where we want clarifications. The government will go ahead with the proposal after the clarifications come," an information and broadcasting ministry official said on Tuesday.

Another issue the government wants to clarify is the nature of the joint venture agreement between the two companies and how the relationship between the two partners are structured in the agreement.

When contacted, Vikram Kaushik, head of Space TV, said, "I do not have any comment to offer on this issue."

In January this year, Tata Sons had announced the formation of a joint venture with the Rupert Murdoch-controlled Star group for launching a DTH platform in India. The Tata group holds 80 per cent in the venture, while the remaining equity is with the Star group.

As per the agreement between the joint venture partner, Space TV will divest up to 29 per cent equity in the company to foreign institutional investors.

As per the company's proposal, the equity will be diluted by the Indian partner, following which the Indian shareholding in the company will come down to 51 per cent from the present 80 per cent. News Corp's holding in the company will remain at 20 per cent.

News Corp's investment in Space TV will be through the company's indirectly owned Dubai-based subsidiary, Network Digital Distribution Services.

Besides, fresh investment in the equity share capital of Space TV along with Tata Group, will also be acquired by the company. However, the overall holding will remain at 20 per cent. The Indian holding in the company will be through Tata Group investors including Tata Sons Limited.