The Foreign Investment Promotion Board (FIPB) has deferred a decision on the foreign direct investment proposal by Readers Digest Association Inc of the US, which is seeking to acquire the publishing assets of Tata-controlled Readers Digest India Print & Publishing (P) Ltd (RDIPPL).
The move was prompted by the finance ministrys decision to seek clarifications. The ministry has reserved its comments on the proposal.In its application, the US-company had made a special request to be allowed to revert back to the special status enjoyed by the magazine till 1979 as per a cabinet resolution way back in September 1955.
The 1955 resolution allowed RDA Inc to hold equity ownership and publish the magazine in India, singling it out as an exception to the otherwise rigid media policy which bans other foreign publications, particularly news or current affairs, to hold ownership or publish in India.
In 1979, the government asked multinationals, including RDA Inc, to dilute
their holdings to 40 per cent in their Indian subsidiaries. RDA Inc, however, decided against holding on to a minority stake and instead transferred its ownership to eminent Indians. Subsequently, RDIPPL was formed, which took over 100% of Readers Digest Association Pvt Ltd (RDAPL).In its proposal, RDA Inc has indicated that it proposes to acquire the publishing assets of RDIPPL in two stages. In the first stage, the assets will be transferred to RDAPL)
