New Delhi: Government today eased norms for private FM radio sector allowing the players operating for less than five years to set up subsidiaries or merge group firms through transfer of shares, giving them financial flexibility.
“The I&B ministry has been authorised to grant permission to FM broadcasting companies for creation of subsidiaries, mergers or demergers or amalgamation of companies by way of transfer of shares,” I&B Minister Priyaranjan Dasmunsi told reporters after the Cabinet meeting.
This would smoothen demerger of the radio business. At present, the FM Phase II policy does not allow change in ownership through transfer of shares of the major shareholders to any new stakeholders without the written permission of the I&B ministry.
“No company with or without foreign investment is allowed to change ownership through tansfer of shares of the majority stakeholders to any entity without permission of government during the first five years of the channel’s operation.
However, if a company approaches government for transfer of shares to create a subsidiary, amalgamation of firms in the same group, demerger of an unit, then it can now be allowed within the five-year period but subject to conditions like maintaining 51% stake by the promoters/majority shareholders,” he said.