The Foreign Investment Promotion Board (FIPB) has deferred a proposal of Zee Entertainment Enterprises Ltd (ZEEL) to hive off the education operations of ETC Networks Ltd under a separate company.
Representatives of the ministry of information and broadcasting had requested deferment to examine if the proposal was in line with their norms.
ZEEL had wanted to merge ETC Networks with itself and then to operate the education business of ETC under a new company, Zee Learn Ltd. ETC, which runs two music channels, ‘ETC Music’ and ‘ETC Punjabi’, also has products for child education and youth vocational training.
ETC Networks runs Kidzee, Kidzee High, Kidzcare, Zee Institute of Media Arts, Zee Institute of Creative Arts and Zee Career Academy. ZEEL has a stake of 50.18 per cent in ETC Networks Ltd.
On approval, ZEEL intended to allot 10 equity shares of Re 1 each to shareholders, including foreign shareholders, of ETC for every 11 shares of Rs 10 held in ETC. The Department of Economic Affairs approved the proposal, subject to it being compliant with the guidelines of the Consolidated FDI Policy.
According to these guidelines, the percentage of shareholding of persons resident outside India in Zee Learn Ltd should not exceed the specified sectoral cap. Further, the new company should not be engaged in activities prohibited under the FDI Policy.
ZEEL is engaged in the business of broadcasting satellite television channels, acting as advertisement/canvassing agent for other TV channels, sale of programmes, including films, primarily to its subsidiaries for broadcast, and in the production and distribution of films. ZEEL uplinks TV channels, including its flagship ones, Zee TV and Zee Cinema, from India.