As part of an internal restructuring exercise, Sony Entertainment Television (SET) India has decided to acquire 100 per cent equity in SET Satellite Singapore through a share swap and increase the foreign holding in the Indian entity to 90 per cent.
The company proposes to purchase 100 per cent shares of SET Singapore shares in the ratio of 1:16 SET India shares to SET Singapore. As a result of this swap, the foreign holdings of Sony Pictures Entertainment entities, the parent, would go up from the existing 61 per cent to 90 per cent. Also, there would be no outflow of foreign exchange.
However, the presence of Grandway Global Holdings Ltd, an OCB based in Mauritius has led to the Government seeking views from the Reserve Bank of India. The RBI had derecognised OCBs as investors in September 2003. As a result, the company was asked to submit a revised proposal. Sony has clarified that Grandway Global is an NRI-controlled company incorporated in Mauritius. The name also does not figure in the list of OCBs derecognised by the RBI or SEBI. While the name of all the shareholders have been provided by the company, their exact shareholding has not been given.
The Foreign Investment Promotion Board deferred the proposal as it is awaiting clarifications from the company as well the RBI. The Information and Broadcasting Ministry has not raised any objections and has only asked the company to adhere to the broadcasting laws, not undertake broadcasting from Indian soil unless specifically permitted and observing equity limits as prescribed for electronic media.
The reason for hiking the foreign equity, according to SET, is to popularise Indian culture, language and traditions to the Indian diaspora located across the world.