The Foreign Investment promotion Board (FIPB) on Saturday was unable to discuss the case of music giant EMI Plc and Chaitra Leo Burnett (CLB) advertisement agency as the information and broadcasting (I&B) ministry had asked for a deferment.
This is despite the earlier statement of Union broadcasting minister Sushma Swaraj that her ministry will not seek deferment of non-broadcasting media proposals.
British music giant EMI Plc, facing strains in its relationship with its Indian collaborator, the R P Goenka-promoted Gramaphone Company of India Ltd (GCIL), has sought government permission to set up a 100 per cent subsidiary in India to dabble in audio-music related activities.
Chaitra Leo Burnett s case relates to US-based Leo Burnett hiking its stake in CLB from 51 per cent to 100 per cent which would turn the company into a wholly-owned subsidiary of the US parent.
According to 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 information and broadcasting ministry 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 approving the foreign partners new venture, EMI finds itself in a jam. Gramaphone Company of India Ltd, reportedly, had written to the industry ministry expressing its concern and objection at EMIs proposal as it would effect the Indian companys business prospects. EMI holds about 10 per cent stake in Gramaphone Company of India Ltd .
The FIPB, while deferring the EMI proposal earlier in the year, had said: The SIA may call the applicant company (EMI group) to discuss their 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, Gramaphone Company of India Ltds honeymoon with EMI Plc, is finally coming to an end. From January Gramaphone Company of India Ltd ceased to be an exclusive licencee of EMI in India.
The latter has appointed Mumbai-based Milestone Entertainment as its licencee and exclusive distributor of audio cassettes featuring international EMI artists like Spice Girls.
In GCIL, the Goenkas hold 50 per cent stake, financial institutions 25 per cent, individuals 15 per cent and 10 per cent by EMI. EMI also holds 12.5 per cent stake in Channel V, a joint venture between Rupert Murdochs News Corp (per cent) and four entertainment companies, Warner group, BMG, Sony Pictures and EMI.
