MUMBAI: The Foreign Investment Promotion Board (FIPB) has formally cleared the transfer of shares held by Indian residents in production company K Sera Sera to non-resident Indian investors. The share transfer amounts to 18.15 per cent of K Sera Sera's total equity base.

The share sale transaction was done through an off-market deal as per information furnished by the company to the
government. At the moment (post-transfer), foreign holding in K Sera Sera stands at 38.04 per cent.

India’s Foreign Investment Promotion Board (FIPB) recommended the K Sera Sera proposal for clearance late last month subject to the condition that it should conform to the existing foreign direct investment (FDI) sectoral policy.

As per an extant policy, 100 per cent FDI is permitted under automatic route for film production.

While recommending the case for finance minister’s approval, the FIPB also noted that if for acquisition of 18.15 per cent of total equity, the FIIs and NRIs have to make an open offer to the public, as per regulatory framework, it should be done.

The company’s share on the Bombay Stock Exchange closed Wednesday at Rs 126 after opening the day at Rs 131.25.

K Sera Sera was formed in 2002 after a take-over of a listed company Garnet Paper with the help of some NRIs in Hong Kong and the USA, as per information furnished by the company to the government.

Though primarily into film production and distribution business, K Sera Sera made its debut in the television segment of the entertainment industry earlier this year by launching Kuchh Love Kuchh Masti on Sahara One.

The company had submitted an application for post facto approval for transfer of shares in favour of seven NRIs namely KH Ramani, Virendra Khurana, Bhagwandas Chandiramani, Ashok Pamani, Kamini Pamani, RS Motwani and RK Sabnani who acquired 26,33,646 shares of the company through off-market purchases.

In addition, the company also made preferential allotment of fresh shares of 24,88,186 to the NRI and FII investors.

Though the government recently put transfer of shares from resident to non-residents under automatic route, subject to certain conditions, the FIPB did ask for comments from the related ministries as this particular proposal was submitted to the government before policy changes were effected.

While the department of heavy industry had no comments to offer initially, the information and broadcasting ministry did not have any objection to the proposal as it was getting covered under the automatic approval route.

In an interview to indiantelevision.com in the beginning of 2004, company executives had said that 75-80 per cent of revenue was being sought to be generated through movies, while the rest will be through television work, whose share is likely to go up substantially in 2005. Towards this end, the company had admitted signing up Ravi Rai, Clapstem's Girish Mallik and DJ Creative's Tony Singh for televsion assignments.