Star-promoted Space TV's plan to start direct-to-home television in the country has run into trouble with the government asking it to fulfill certain conditions, including complying with the eligibility criteria on foreign equity holding, before issuing a license to start operations.
Stating this in the Lok Sabha on Thursday, Minister of Information and Broadcasting Ravi Shankar Prasad said Space TV has also been asked to pay a non-refundable fee of Rs 10 crore (Rs illion) to enable the ministry to issue a letter of intent.
This is subject to Space furnishing an affidavit that it has fulfilled certain conditions like using an Indian satellite or any other satellite approved and recommended by the Department of Space with its proposed DTH project, he said.
Space TV has also been asked to declare that it would adhere to the specifications stipulated by the government on the architecture of the set top box, including provisions of its interoperability, Prasad said.
This was in view of the clarification issued earlier by the finance ministry that Space TV's present equity came from two employees of Star TV, which cannot be treated as domestic shareholding as the funding for this equity contribution has been "raised through bank finance in India, against the security of a deposit of Rs 10 crore made by Star TV".
However, they also stated that DTH guidelines do not make a distinction between stages of letter of intent and issue of a license or post license operations, for applying eligibility criteria on the limit of foreign equity holding.
The home ministry has also stated that Space TV was incorporated on January 9, 2001 whose two promoters are G Jagdish Kumar and Ajay K Sharma while G Subramaniam is the CEO of the firm.
It also observed that all the three people were currently working with Star India in different capacities.
Besides, the head office and regional office addresses of Space TV belong to Star India.