The Foreign Investment Promotion Board (FIPB) has refused to grant advance permission to Sony Entertainment Television India Pvt. Ltd., (SET), to buy out the minority partners in its joint venture distribution company in India and convert it into a 100 per cent subsidiary.
Earlier SET India had sought FIPB permission to convert its distribution joint venture with Discovery Communications India Pvt Ltd into a 100 per cent subsidiary as and when Discovery wants to exit the company at any stage of the business. FIPB's refusal to SET means that Discovery will be able to make third party sale of its stake in the joint venture in part or in full subject to other regulatory clearances.
SET India and Discovery India are currently in the process of setting up a joint venture distribution company to market cable and satellite channels and provide subscriber management services to the cable TV operators in India following a recent FIPB approval. SET India and the Discovery Channel holds 74 and 26 per cent stake respectively in the joint venture company.
SET India had sought FIPB clearance for an advance permission to buy out its minority partner, Discovery India, if the latter opted to sell out even before the company has started functioning.
Source: Business Line