MIB asks non-compliant digital news entities to adhere to 26% FDI cap policy
In a reminder sent on September 7, the Ministry of Information & Broadcasting has asked the non-compliant entities to take necessary action within three weeks
The digital media division of the Ministry of Information & Broadcasting (MIB) has asked non-compliant news websites/news portals, news aggregators, and news agencies to comply with the foreign direct investment (FDI) guidelines that caps foreign holding at 26%. Prior to the framing of FDI policy for digital news, there was no restriction on foreign holding in digital news companies.
As per the reminder dated September 7, the ministry has asked non-compliant digital news platforms to furnish information sought by the government as per the public order dated November 16, 2020. In the reminder, the MIB had asked the non-compliant entities to take necessary action within three weeks from the date of issue of the reminder.
In November 2020, the ministry had issued a public notice asking entities having foreign investment below 26% to furnish information about details of the company/entity, shareholding pattern, names & addresses of its directors/shareholders besides the Permanent Account Number and the latest audited/unaudited profit & loss statement and balance sheet along with the auditor report within one month.
The ministry had also sought a confirmation with regard to compliance with pricing, documentation, and reporting requirements under the FDI Policy, Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and Foreign Exchange Management (Mode of Payment and Reporting of Non-debt Instruments) Regulations, 2019 along with copies of relevant reporting forms in support of the past/existing foreign investment and downstream investment(s), if any.
Digital news entities with over 26% foreign holding also had to share similar details with the ministry within one month from the issue of the public notice, and take necessary steps for bringing down the foreign investment to 26% by 15th October 2021 and seek approval of the MIB.
“While some entities have ensured compliance in accordance with the Public Notice, it is requested that the entities which are yet to comply with the same may take necessary action within three weeks of the issue of this reminder,” the ministry said in its reminder notice dated 7th September.
As per the Union government's decision on 18th September 2019, any entity which intends to bring fresh foreign investment in the country has to seek prior approval through the Foreign Investment Facilitation Portal of DPIT, as per the requirements of FDI Policy. Investment means to subscribe, acquire, hold or transfer any security or unit issued by a person resident in India.
Furthermore, every entity has to comply with the requirements of citizenship of the Board of Directors and of the Chief Executive Officers (by whatever name called). The entities are required to obtain security clearance for all foreign personnel likely to be deployed for more than 60 days in a year by way of appointment, contract, or consultancy or any other capacity for functioning of the entity, prior to their deployment. For this purpose, the entities will have to apply to the MIB at least 60 days in advance and the proposed foreign personnel shall be deployed by the entity only after prior approval of the ministry.
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