The government is considering the option of allotting a golden share to the promoters of domestic print media companies in order to ensure their absolute control, in spite of a 26 per cent foreign holding.
According sources a 26 per cent stake in an Indian print media company can give a foreign investor the power to block all special resolutions moved by the company’s board of directors, according to the Companies Act. A golden share will come with special powers to steam roll any such opposition from the foreign stakeholder.
This option, along with other alternatives, was discussed on Wednesday at a meeting convened by the information & broadcasting secretary, Pawan Chopra, to work out the guidelines to permit foreign direct investment (FDI) in Indian print media companies in the field of news and current affairs.
Another option discussed at the meeting was the mandatory inclusion of a clause in the joint venture agreement between an Indian company and its foreign partner that would ensure operational as well as editorial control in Indian hands.
The government is also considering to amend the articles of association of companies to the effect that the ownership and management control would remain with the Indian shareholders. A final decision is yet to be taken.
According to sources the guidelines to govern FDI in print would be finalised in the next one month. The government has also set up an inter-ministerial group to finalise the guidelines.