New Delhi, March 9
INDUSIND Media & Communications Ltd (IMCL)has come under the scanner of the regulatory authorities following the company's request to use share subscription money from Swiss investment company, Kudelski SA, for buying conditional access system (CAS) and set top boxes (STBs) from a subsidiary company of Kudelski, namely Nagravision.
The Foreign Investment Promotion Board (FIPB) has directed the Reserve Bank of India, Department of Revenue (Customs) and the Ministry of Information and Broadcasting to verify the details provided by IndusInd Media to the FIPB.
IndusInd Media, controlled by the Hinduja family,is engaged in running cable TV networks for multi-channel entertainment. Switzerland-based Kudelski SA is in the process of subscribing to 15,34,400 equity shares of Rs 10 each in the company for a total consideration of $11,914,000. Once allotted, Kudelski would be holding a three per cent stake in IndusInd Media.
Meanwhile, IndusInd Media has reached an understanding with Nagravision SA to buy CAS and STBs.
As per the understanding Nagravision will provide an exclusive conditional access solution to encrypt and secure the digital pay TV services of IMCL and render turnkey services for deployment of digital pay TV services.
The company has informed the FIPB that Kudelski has opened an escrow account with ABN Amro Bank in London and deposited the amount in that account and has utilised part of the proceeds for payment on behalf of IndusInd Media to Nagravision towards import of CAS and STBs.
RBI, however, refused to regularise the opening of the escrow account and instead directed the company to obtain approval from the FIPB.
The FIPB, in turn, observed that since the company already has an escrow account with ABN Amro in London and some payments have also been made against import of capital goods, it is therefore necessary that the verifications may be made by the RBI and customs authorities before the board takes any decision and has directed the RBI and customs authorities accordingly.