FIPB seeks explanation from DE Shaw on Amar Ujala deal

NEW DELHI: FIPB, a government body that clears foreign direct investment coming into the country, has sought an explanation from global private equity major DE Shaw over a stake purchase in Hindi print media group Amar Ujala.

DE Shaw had acquired 18 per cent stake in Amar Ujala Publications in 2007 for Rs 117 crore, valuing the group at about Rs 650 crore and the deal was approved by FIPB (Foreign Investment Promotion Board) in June that year.

However, now FIPB has sought clarifications from DE Shaw on whether the said Foreign Direct Investment (FDI) was in conformity with all the terms and conditions specified in its approval dated June 14, 2007.

The notice, copies of which has been sent to the Ministry of Information and Broadcasting, RBI and Amar Ujala itself, follows a complaint filed by the media group earlier this month with FIPB against the private equity firm.

FIPB has also sought to know from DE Shaw that whether its investment was linked to any assured returns or special rights and has also demanded the copy of their deal agreement.

In its approval, FIPB had said that DE Shaw would need to first intimate it, as also RBI and Ministry of Information and Broadcasting, before effecting any changes in the deal terms.