New Delhi: The Union government has cleared two proposals from Rupert Murdoch’s Star group for increased foreign direct investment in its media businesses in India. In a 7 May meeting, the government approved investment proposals amounting to almost Rs750 crore in its direct-to-home venture and regional broadcasting units.
Star will use Rs425 crore of this to consolidate its stake in Asianet Communications Ltd, which it already controls.
“While Rajeev Chandrasekhar of Jupiter will continue to hold equity in the venture, we will use the money to buy out other minority shareholders,” said Uday Shankar, chief executive officer of Star India Holding BV.
Star India also sought permission to bring in Rs324 crore to acquire up to 49% in TS Investment Ltd, in which Tata Sons Ltd now holds 100%. The government release said TS Investment will, in turn, acquire shares of the joint venture Tata Sky Ltd.
Star already owns 20% of Tata Sky—Tata Sons has 70% and Mauritius-based Baytree, 10%. FIPB had in its April meeting deferred this decision. Shankar said the shareholding will go up only in the holding firm. “There is no change in the operations of Tata Sky,” he said, adding that the money will be used for growing the DTH business.
The Star investment in TS Investment is also among the first cases where a foreign investor is taking advantage of India’s new foreign investment rules that say foreign investment in a holding firm where Indian shareholders own 51% and manage the company will not be taken into account while calculating the extent of foreign ownership of a subsidiary. In this case, TS Investment is the holding company and Tata Sky the subsidiary.