New Delhi, Sept 11 (UNI) The Union Cabinet today approved changes in the policy for the private FM Radio Phase II, aimed at giving a fillip to expansion of the sector.
The private FM broadcasters were facing various difficulties, so the modifications in the existing policy would give them financial flexibility and promote the growth of the FM industry, Minister for Information and Broadcasting Priya Ranjan Dasmunsi said, briefing mediapersons about the Cabinet meeting.
Now FM broadcasting companies can create subsidiaries, go in for merger- demerger and amalgamation of companies by way of transfer of shares.
However, no shareholder, whether with or without foreign investment, would be allowed to change the ownership pattern of the company through transfer of shares without the written permission of the Ministry of Informatioin and Broadcasing.
The permission will not be allowed for a period of five years from the date of operationalisation of the channel, subject to the condition that the new shareholder conform to all the prescribed eligibility criteria.
However, the request for transfer of shares for the purpose of creation of a subsidiary company, amalgamation of companies of the same group, de-merger of company etc would be allowed within a period of five years on the following conditions: The majority shareholders would continue to remain as majority shareholders and together should hold at least 51 per cent of the total shares.
The new corporates entities would also maintain their FDI component within the precribed limit and would not violate the terms and conditions of the tender document and grant of permission agreement.
They should have minimum prescribed net worth and adhere to all the terms and conditions of the tender document and the provisions of the agreement.
The new company would be required to sign a fresh agreement with the Government on identical terms and conditions for the remaning period of licence of the original company.
The transfer of shares would be permitted only once in the first five year period from the date of operationalisation.
No new tax regime will be designated to provide any incentive to encourage creation of subsdiaries, merger, demerger and amalgamation of FM Broadcasting companies.
Tax implications would be governed by the Income Tax Act of 1961.
The action taken by the companies need to be compliant with the Companies Act, 1956. The applicant will not dilute such requirement through its Articles of Association or any Agreement.
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