The information & broadcasting (I&B) ministry has put on hold the proposals of at least half-a-dozen broadcasters to start or add news channels since it wants the finance ministry to first vet the overall foreign investment—direct and indirect—-in these companies.

At present, there is a 26 per cent cap on foreign direct investment (FDI) in news channels. The I&B ministry has sought clarity on foreign institutional investor holdings in these broadcasters, given the government’s skittishness regarding overseas ownership of broadcast news. Sources said the I&B ministry felt only the finance ministry had the necessary wherewithal to ensure that foreign investment caps were not breached.

The government is reviewing FDI rules to bring transparency and clarity to indirect shareholdings to ensure that companies do not overtly or covertly breach FDI caps. The entire issue comes in the backdrop of the recent Hutch-Essar case, which brought to light the complex loan guarantees given by foreign players to their Indian partners, thereby raising allegations of a breach in FDI caps.

According to finance ministry and FIPB sources, the I&B referred news channel cases will only be taken up once new norms governing FDI have been finalised. Meanwhile, the decision by the I&B ministry is likely to delay the launch of around 30 news and current affairs channels, which are awaiting approval. Global Broadcasting Network and sister companies Television 18 and IBN are together understood to have at least eight channel applications pending with the ministry. Another news channel project believed to be pending include that of Siddharth Basu’s Synergy.