As part of the deal, the Indian broadcaster will transfer 700, 000 equity shares of Rs 10 each to the foreign investor from its Indian shareholder, Anjali Technology Holdings.
Asianet Communications, which produces and telecasts entertainment and news-based programmes for Malayalam channel Asianet and Asianet News channels, has been permitted by the government to transfer the equity.
However, the government permission has come with certain riders. The government has asked the broadcaster to come within the purview of the news and current affairs TV channels in India.
The government has also stipulated that the in the case of foreign investment in the company, it should be limited to 26 per cent foreign direct investment.
Besides, the government has pointed out that the company should not bring in any other kind of foreign investment into it.
It is worth noting that the government is in the process of allowing foreign institutional investors to invest in Indian news channels with in the existing sectoral FDI cap of 26 per cent.
The government has also late last year stipulated that a broadcaster, which is not a 24 hour news broadcaster, will also have to comply with the news channels up-linking norms if it is airing any new-based content.
The directive of the government asking the broadcaster, which also operates entertainment channels, to comply with news channel up-linking is in conformity with this norms, said sources.
The channel has also been asked to take prior permission of the ministry of information and broadcasting before effecting any changes in the shareholding pattern of the company.
Besides, government also wants the Indian shareholder in the company to be the single largest Indian shareholder in it.
It is also pointed out that the Indian company also should intimate the names and details of all the members on the board of the company to the government for its approval.
