Govt Defers Verdict On Sony Pics Subsidiary

The plans of Sony Pictures, part of Japan-based Sony Corporation, to set up a 100-per cent subsidiary in India has run into problems with the government deferring a decision on the project saying that such cases will be considered only after a broadcasting legislation is put in place.

The government has also refused to take a stand on another proposal of Sony Pictures to start a Tamil satellite channel on the ground that the percentage of foreign equity in such future ventures has not been okayed by the cabinet which is studying a note on the proposed broadcasting bill.

The cabinet note proposes to limit foreign holding to 49 per cent in joint ventures in the electronic media.

 

Sony Pictures, which holds approximately 60 per cent stake in Sony Entertainment TV India, proposes to start a Tamil channel with 80 per cent equity stake.

According to sources in the Foreign Investment Promotion Board, an application for a 100 per cent subsidiary of Sony Pictures, has been lying with the board for the last few months. The proposal envisages setting up a modern dubbing studio in Mumbai.

The sources also confirmed that a high-level delegation from Sony Pictures met industry ministry officials earlier this week to lobby for an early clearance of the proposals envisaging investments worth at least few millions of dollars in India.

However, the information and broadcasting ministry has been objecting to clearance of such foreign proposals, especially 100 per cent subsidiaries, saying that such decisions should be deferred till the passage of the proposed broadcasting bill which is slated to be introduced in the Budget session of Parliament.

Bowing to pressures from the I&B ministry, industry minister M. Maran has withheld okaying setting up of a 100 per cent cable company subsidiary by Rupert Murdoch-controlled News Corp christened Indco. The FIPB had recommended its clearance in the third quarter of last year.

After a steady show by Hindi-language general entertainment satellite channel, Sony Entertainment TV (SET), Sony Pictures had shown interest in expansion and bringing in more investment in India. In SET, Sony Pictures' Indian partners, including film star Jackie Shroff, together hold 40 per cent stake.

Sony Pictures' expansion plans include making forays in Indian-language channels and also start a pay-per-view premium movie channel airing a mix of Hindi and English films. However, details have not been finalised yet owing to government refusing to take a stand on the proposals taking refuge behind the proposed broadcasting laws, Sony sources explained.

SET, which completed one year's of operation in October last year, has been showing steady progress. There are plans to invest about Rs 125 crore in the Hindi-language channel over the next two years.