Even as union information and broadcasting minister Sushma Swaraj expresses the view that her ministry will not ask for continuous deferment of non-broadcasting media proposals, the Foreign Investment Promotion Board (FIPB), on Saturday, was unable to discuss the cases of music giant EMI Plc and advertising agency Chaitra Leo Burnett (CLB) as the I&B ministry had asked for a deferment.
British music giant EMI Plc, facing strains in its relationship with its local collaborator, the R P Goenka-promoted Gramophone Company of India (GCIL), has sought government permission to set up a 100 per cent subsidiary in the country to dabble in audio-music related activities.
CLBs case relates to US-based Leo Burnett hiking its stake in the agency from 51 per cent to 100 per cent which would turn the company into a wholly-owned subsidiary of the US parent.
According to senior government officials, The EMI proposal had been pending for quite sometime with the FIPB and since clarifications had been sought, the case was listed. But the ministry has asked for more time to study the EMI case as well that of CLB.
Since the FIPB generally asks for an endorsement from the Indian collaborator company okaying the foreign partners new venture, EMI finds itself in a jam. GCIL, reportedly, had in the past expressed its concern and objection to the industry ministry at EMIs proposal as it would effect the local companys business prospects. EMI holds about 10 per cent equity stake in GCIL.
The FIPB, while deferring the EMI proposal earlier in the year, had stated: The SIA may call the applicant company (EMI group) and discuss with them the activities they propose to undertake and to find out whether the proposed activities of the applicants would have a bearing on the activities of the existing joint venture of the company. This apart, GCILs honeymoon with EMI Plc, is finally coming to an end. From January, GCIL has ceased to be an exclusive licencee of EMI in India. The latter has appointed Mumbai-based Mile-stone Entertainment as its licencee and exclusive distributor of audio cassettes featuring international EMI artistes like Spice Girls.
The Goenkas have 50 per cent stake in GCIL while 25 per cent is held by financial institutions, 15 per cent by various individuals and 10 per cent by EMI which also holds 12.5 per cent stake in Channel V, a joint venture between Rupert Murdochs News Corp (50%) and four entertainment companies, Warner group, BMG, Sony Pictures and EMI.
