BBC World Service India is in the process of restructuring its shareholding as part of a strategic move by the British Broadcasting Corp (BBC) to comply with India’s foreign direct investment (FDI) regulations, as reported by The Economic Times (ET). The FDI norms stipulate a maximum foreign ownership of 26% in digital news entities, prompting BBC World Service India to explore options for compliance, given its current 99.99% ownership by the BBC.
The Department for Promotion of Industry and Internal Trade (DPIIT) imposed the 26% cap on FDI in digital news entities in September 2019. In response, the broadcasting ministry issued a notice in November 2020, urging entities exceeding this limit to rectify their ownership structure by October 15, 2021.
Following a survey by income tax officials in February, BBC World Service India and BBC Global News India premises underwent further investigations by the Directorate General of GST Intelligence. Subsequently, the Directorate of Enforcement (ED) issued notices under the Foreign Exchange Management Act. Concerns regarding potential non-compliance with FDI norms were raised by the Ministry of Information and Broadcasting in regulatory filings dated March 31 of the current year.
To address the situation, BBC World Service India has presented its restructuring proposals to the ministry and has requested time until March 31, 2024, for compliance. One option under consideration involves offering stakes to key executives, including Rupa Jha (Head of BBC News India), Mukesh Sharma (Head of African Language Services, BBC News), and Sanjoy Mazumdar (Deputy Managing Editor, Asia, BBC World Service).
In the financial year 2022-23, BBC World Service India earned a service fee of Rs 129.4 crore from BBC UK for content production and a programming fee of Rs 77 lakh from licensing content to various platforms. The entity reported revenue of Rs 43.4 crore and a profit of Rs 1.3 crore.
The annual report from the BBC indicates ongoing discussions with the ministry and ED, with uncertainties regarding potential implications, including provisions, that may need recognition in the financial statement. BBC News Deputy Chief Executive Jonathan Munro is expected to announce the changes in ownership structure on Tuesday, as per the ET report.
