Tatas May Sell Readers Digest Pie

The Tata group is gearing up to revive its option of offloading a major portion of its stake in Reader's Digest India (RDI).

The group holds the entire equity in the company, which has the license to publish Reader's Digest from India.

The group would be able to now offload upto 74 per cent in the company, after the Centre last week allowed foreign direct investment in the print media. Reader's Digest falls in the non-news and specialist magazines category, where the government has allowed 74 per cent FDI.

In July 1997, Reader's Digest Association Inc (RDA) had approached the Foreign Investment Promotion Board to acquire the publishing assets of its Indian affiliate, but the proposal was eventually turned down by the government, resulting in a major controversy.

The Tatas were forced to stay on in the company following this government decision. The RDI stake is held primarily by Titan Industries, Tata Infomedia and some other Tata group companies.

A senior Tata group official said, "We would be keen on divesting part of our stake in the company as and when all the necessary clearances go through. However, RDA has yet to reactivate the earlier proposal but we understand that they could be doing so soon."

Sources close to Reader's Digest said: "RDI is a small company and the Tatas are not particularly keen on this venture, given the group's focus on their declared core businesses."

The board of RDI has several Tata group stalwarts like Xerxes Desai as chairman, Bhaskar Bhat, managing director of Titan, and Tata Infomedia chairman Nawshir Khurody.

In India, Readers Digest, is published by RDI under a licence granted by Readers Digest Association Inc, which is the proprietor of the name and trademark Readers Digest. In 1979, when the government asked RDA to dilute its stake to 40 per cent in RDI, it refused to do so and instead transferred the shares to eminent Indians.