Deadline set for digital media firms to reduce foreign investment

The details on ownership sought to include names and addresses of promoters, directors, significant beneficial owners, and shareholders. The companies have been asked to provide confirmation on compliance with pricing, documentation and reporting requirements under the FDI Policy, Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and Foreign Exchange Management (Mode of Payment and Reporting of Non-debt Instruments) Regulations, 2019.

News websites and other digital platforms providing news and current affairs with foreign investment beyond the permitted 26% of equity have been given till October 21 to reduce this, according to a notice by the information and broadcasting ministry. They, and other entities with foreign investment even up to the permitted limit have been asked by the ministry to provide details of their ownership patterns within a month.

The details on ownership sought to include names and addresses of promoters, directors, significant beneficial owners, and shareholders. (Getty Images. Representative image)

The norms also apply to entities involved in uploading or streaming of news and current affairs through digital platforms.

The details on ownership sought to include names and addresses of promoters, directors, significant beneficial owners, and shareholders. The companies have been asked to provide confirmation on compliance with pricing, documentation and reporting requirements under the FDI Policy, Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and Foreign Exchange Management (Mode of Payment and Reporting of Non-debt Instruments) Regulations, 2019.

“The decision to keep it to 26% is also linked to concerns about the kind of content including on various digital media including social media. There is a view that there is need to ensure that the control on media should not be entirely in foreign hands. It can be a perceptional matter. However, as such details are not a secret, I don’t see any problem with entities sharing it,” former I&B secretary Uday Kumar Varma said. The ministry has also sought the Permanent Account Number and the latest audited or unaudited profit and loss statement and balance sheet along with the auditor report.

Every entity has to comply with the requirements related to the citizenship of the Board of Directors and of the Chief Executive Officers. The ministry has also asked the entities to obtain security clearance for all foreign personnel likely to be deployed for more than 60 days in a year.

Where FDI is involved, often security clearances are required, so I do not see anything different here, he added.