Sony Entertainment Television is understood to have approached the government for permission to acquire SET Satellite Singapore and consequently hike its total foreign shareholding to about 90 per cent.
The government has, however, sought some clarifications from the company while referring the matter to the Reserve Bank of India for its views, sources associated with the process said in New Delhi on Thursday.
When contacted, SET India chief Kunal Dasgupta declined to comment on the issue saying the subject was under the jurisdiction of the parent company in the United States.
SET India, in which Sony Entertainment Pictures holds 64.5 per cent stake, plans to acquire 100 per cent of SET Satellite Singapore through a share swap deal, sources said.
The acquisition will not involve outflow of foreign exchange from India, the proposal clarifies.
On its part, the information and broadcasting ministry raised no objections to SET India's plan except asking it to adhere to broadcasting laws, not undertake broadcasting from Indian soil unless specifically permitted and observing equity limits as prescribed for electronic media.
"The company wants to develop into an international centre for entertainment and media designed to popularise Indian culture, language and traditions among the Indian diaspora located around the world. To achieve this objective the company has sought approval for an internal restructuring," they said.
As per the proposal SET India has submitted to the FIPB, it plans to first purchase 100 per cent of the equity shares of SET Singapore pursuant to the share swap against the allotment of share of SET India in the ratio of 1:16 SET India shares to SET Singapore shares, sources said.
Then, it plans to issue shares of SET India as per the share swap. The issuance of SET India shares to new shareholders in SET India would be done so that SPE Singapore will be allotted 25.36 lakh (2.54 million) shares comprising 37.9 per cent of SET India's equity.
These shares will be simultaneously transferred to SPE Mauritius Holdings and SPE Mauritius Investments, both wholly owned subsidiaries of SPE Singapore and existing percentage ownership interests.
