The Hindu Business Line : Govt to take a relook at FII investment in news channels

WITH several media companies, including the Prannoy Roy-promoted NDTV, planning to tap the capital market, the Information and Broadcasting (I&B) Ministry is planning to have a relook at permitting foreign institutional investors (FIIs) investing in news and current affairs television companies.

According to the existing norms, 26 per cent foreign direct investment is permitted in news and current affairs channels, but FII investment is not permitted in these companies.

Sources in the I&B Ministry said that broadcasting companies have approached the Ministry to relax the foreign investment norms and allow FIIs to invest in the companies. Television Eighteen (TV 18) and TV Today, which recently concluded its initial public offering (IPO) and got listed, have been seeking a relaxation. TV 18 has 10.6 per cent FII investment which it had got prior to the FDI norms being put in place. "Companies have said that FIIs invest in them not with an eye on management or editorial control, but do so purely as investors who would exit after booking reasonable profits," said sources. Some of the companies such as TV 18 or Zee Telefilms, which already have FII holding are finding it difficult to ask these institutions to exit the companies, they added. During its recent public offering, TV Today too had requested the Government to permit FII investment. The Government did not permit them to do so and had said that the policy would have to be reviewed.

If the FDI norms are relaxed to permit FII investment, the I&B Ministry would also have to ensure that adequate safeguards are in place so that there is no management or editorial control by the foreign investor.

The Government had last year decided to bring the foreign investment levels in news and current affairs television channels wishing to uplink from India at par with the limits fixed for news and current affairs publications.

Subsequently, Star News has been one of the main channels which received clearance from the Government to uplink from the country. The application of TV 18 was rejected and Zee News would have to restructure its operations to comply with the guidelines later this year.

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