BBC World Service India to restructure shareholding for FDI norm compliance

BBC World Service India is undergoing a shareholding restructuring, with the British Broadcasting Corp (BBC) aiming to comply with the Indian government's foreign direct investment (FDI) guidelines, according to a report by The Economic Times (ET). The FDI norms limit foreign holdings in digital news entities to 26 per cent, prompting BBC World Service India to explore options for adhering to these regulations as currently 99.99 per cent owned by the BBC.

The Department for Promotion of Industry and Internal Trade (DPIIT) had capped FDI in digital news at 26 per cent in September 2019.

In February, income tax officials surveyed BBC World Service India and BBC Global News India premises, leading to further investigations by the Directorate General of GST Intelligence and notices from the Directorate of Enforcement (ED) under the Foreign Exchange Management Act. The Ministry of Information and Broadcasting further raised concerns about alleged non-compliance with FDI norms, as indicated in regulatory filings dated March 31 of this year.

To rectify the situation, BBC World Service India has communicated its restructuring proposals to the ministry and seeks time until March 31, 2024, for compliance. One potential option being considered 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. It also reported Rs 43.4 crore in revenue and a profit of Rs 1.3 crore.

BBC's annual report also added that there were pending discussions with the ministry and ED and that the broadcasting giant could not estimate the "consequent implications, including provisions, if any, that may need to be recognised in the financial statement."

BBC News Deputy Chief Executive Jonathan Munro is expected to announce the changes in ownership structure on Tuesday, the ET report added.