Murdoch facing India ban

STAR TV, the pan-Asian broadcaster controlled by Rupert Murdoch, faces a lengthy wrangle with the Indian authorities over its shareholding structure that has threatened to take its local news operation off the air.

Any interruption to the satellite news broadcasts would be a severe blow to Star's credibility in India, a key market for Murdoch's ambitions to develop his regional media interests.

The dispute centres on the level of Indian ownership of Star TV's local news operations. New national guidelines introduced earlier this year stipulate that resident Indian nationals must own at least 74% of the media unit's equity. A spokesman said that Star's Media Content & Communications Services India unit had complied with the regulation, and the company had applied for a permanent licence to 'uplink' satellite news images in India for broadcasting nationwide.

'The government regulation was that we needed to have our holding reduced to 26% and that is what we have done,' the spokesman said.

'They gave us three months to do that and within those three months we restructured the company. We have got a 26% shareholding and the rest of the 74% is still with Indians,' he added.

But the Indian authorities - principally the Foreign Investment Promotion Board - remain unconvinced. Officials last week asked for more information from Murdoch's group. As negotiations continue, Star has been granted a weekly licence to uplink its Indian satellite news images. The permit must be renewed in the coming days.

'It is in the process of being solved,' the spokesman said. 'There are some clarifications that we are giving them. The process takes some time.'

The FIPB is the government's main regulatory gatekeeper for all foreign-invested projects in the country. If Star fails to satisfy the body, its uplinking licence will be suspended.

The dispute comes as competition in India's media sector has been increasing, with the growth of several aggressive local news operations alongside those of Star. After China, India's fast-growing market of 1.02bn people is viewed as one of Asia's most promising. Star says that its broadcasts of news, music, sport and entertainment reach a weekly audience of 120m in more than 50 countries.