NEW DELHI: The government has issued guidelines for permitting 26 per cent foreign direct investment (FDI) in news and current affairs publications in a venture subject to the condition that the largest Indian shareholder controls at least 51 per cent equity in the company.

This 51 per cent equity is exclusive of that held by public sector banks and financial institutions and of the total FDI envisaged in any joint venture at least 50 per cent will have to be inducted by issue of fresh equity, an official statement said here. The balance 50 per cent can be from the existing equity base of the company.

Foreign holding component in the equity of the Indian shareholder companies will be duly reckoned on pro rata basis to arrive at the total foreign holding in the company while calculating the 26 per cent FDI in equity of the company. The guidelines further stipulate that at least 75 per cent of the directors and all key executives and editorial members of the company should be resident Indians.

According to the guidelines, it is obligatory on the part of the Indian company to take prior permission from the ministry of information and broadcasting before changing the foreign shareholding pattern of the company and the shareholding of the largest Indian shareholder.

While rejecting the idea of a golden share, the government has said that the applicant and the new entity has to make full disclosure, at the time of application, of shareholders agreements and loan agreement that are finalised or proposed to be entered into. Any changes in these have to be disclosed to the ministry of information and broadcasting within 15 days.

The new entity framing its articles and memorandum of association has to ensure compliance with these norms. Besides as a measure to check the credentials of the foreign equity partner, the Indian company is required to inform the names and details of all the non resident Indians who are to be inducted in the boars of directors of the company

The Indian company is also required to inform the names and details of any foreign nationals and non resident Indians to be employed and engaged in the company as consultants or in any other capacity for more than 60 days in a year as regular employees.

All the proposals for FDI in Indian companies publishing news and current affairs publications shall be processed and decided by the information and broadcasting ministry in consultation with the home ministry and other ministries.