A V Birla Group chairman Kumar Mangalam Birla, who last month picked up a 25 per cent stake in Star News through his private investment firms, is understood to have offloaded it to an unidentified buyer. Details of the deal or the buyer were not known.
A Birla Group spokesperson declined comment on the issue. Star India executives said they had not yet been officially intimated by Birla about the development.
Sources familiar with the development said Birla's decision to sell the stake was prompted by the increasing propaganda from rival media groups that Star's decision to place a majority of the channel's stake with close associates was an attempt at backseat control of the channel, circumventing foreign investment norms.
Birla acquired a stake in the Rupert Murdoch-controlled Star News last month when Star offloaded a 74 per cent stake in the company to several Indian citizens. As per the government guidelines, foreign investment in a news and current affairs channel uplinking from India cannot exceed 26 per cent.
Along with Birla, the others to pick up stakes were DSP Merrill Lynch chairman Hemendra Kothari, adman Suhel Seth, lawyer R Karanjawala, actor and Balaji Telefilms founder Jeetendra, threatre personality Maya Alagh (wife of former Britannia MD Sunil Alagh), and Hindustan Times editor Vir Sanghvi.
The Indian promoters jointly hold a 74 per cent stake as resident Indian shareholders in Media Content & Communication Ltd, the content provider for the channel. The new entity will have a paid-up capital of Rs 4 crore (Rs 40 million), with Star owning a 26 per cent stake through Star British Virgin Islands.
While Birla had taken a 25 per cent stake, Kothari holds 24 per cent, and the others together hold 25 per cent.
Star is a wholly owned subsidiary of News Corporation. Its content reaches more than 300 million viewers across 53 Asian countries. Its television channels in India include Star Plus, Star World, Vijay, Channel [V], ESPN, Star Sports, Star Gold, Star Movies and Star News.
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