MUMBAI: Ministry of company affairs has rejected most of the contentions of the information and broadcasting ministry relating to Space TV application, while upholding a clause on affirmative rights (to say `yes' or `no' to a board decision) of the minority shareholder.

In its comment sent to the I&B ministry (reference: File 3/20/2005/CL-IInd), the company affairs ministry has said that except section 2, dealing with affirmative right of the minority shareholder, other issues raised by I&B don't cut much ice.

With this, government sources pointed out, the ministry of consumer affairs has submitted its comments on one of the DTH applications, while it grapples with that of Sun TV's, which too has come under government scanner.

Interestingly, various issues raised by the I&B ministry relating to Space TV and Sun 's DTH applications were not brought up when pubcaster Doordarshan started its DTH service.

Technically speaking, some of the DTH guidelines clauses should have brought DD Direct Plus too under a cloud.

Meanwhile, the ministry of company affairs does agree that the clause relating to the affirmative rights of Star Group --- having almost a veto power regarding board decisions of Space TV --- could be questioned.

According to Indian laws, a shareholder needs to have at least 26 per cent holding in a joint venture to have veto rights on board decisions. The affirmative rights clause in the Space TV shareholders' agreement is similar to this clause wherein the minority shareholder has the right to accept or refuse board
decision with 20 per cent stake only.

Space TV, envisaging putting up a Rs. 16 billion DTH project in India, is a 80:20 joint venture between the Tatas and the Rupert Murdoch-controlled Star Group.