Date:25/06/2005 URL: http://www.thehindubusinessline.com/2005/06/25/stories/2005062501030400.htm

Back I&B Ministry reviews NDTV share transfer plan

Nithya Subramanian
Ambarish Mukherjee

New Delhi, June 24

NDTV promoters Mr Prannoy Roy and Ms Radhika Roy's proposal of gifting 15 per cent stake in the company to daughter Tara Roy, a non-resident Indian, is being reviewed by the nodal Information and Broadcasting (I&B) Ministry.

The Ministry has to firm up its views as the Indian promoters' shareholding would fall below the stipulated 51 per cent. The guidelines for uplinking of news channels stipulates that permission will be granted only in cases where equity held by the largest Indian shareholder is at least 51 per cent of the total equity, excluding the equity held by banks and financial institutions.

The I&B Ministry has sought clarifications from the Department of Economic Affairs regarding the proposed transfer of 15 per cent shares to Ms Tara Roy. It has also sought clarifications from the broadcasting company on whether the proposed transfer of shares to the daughter would amount to foreign direct investment or whether it would continue to fall in the category of Indian investment.

The promoters of Delhi-based broadcasting company had approached the Foreign Investment Promotion Board (FIPB) seeking permission to gift over 9,120,386 shares amounting to 15 per cent stake to Ms Roy, who at present holds just 13 shares in the company.

According to the available information on the shareholding pattern, the promoters hold 54.78 per cent and the transfer will bring down their holding in the company to 39.78 per cent. The foreign shareholding of the company now stands at 3.05 per cent and subsequent to the gift would go up to 18.05 per cent.

FIPB's new order: In order to expedite clearances, the FIPB is planning to write to secretaries of various ministries and departments asking officers of senior rank to be present during the meetings. It has said, "The representation from the Ministries/Departments in the FIPB should be at the senior level and at least at the rank of Joint Secretary, who may be able to clarify the policy issues in the meeting itself; and to enable the FIPB to dispose off any proposal expeditiously," said a note.