Sandur Power Company would pick up a minority stake (less than 26% of Indira TV) through a subsidiary firm Carmel Asia Holding, according to a filing of the company in India’s Foreign Investment Promotion Board. Carmel Asia is an investment company and is also the largest shareholder (on behalf of YS Jagan Mohan Reddy) of Jagati Publications which publishes Telugu daily Sakshi. There are various other prominent industrial groups who are minority investors in Jagati Publications including Matrix Group, India Cements, Lanco, besides the now infamous former chief of Satyam Computers B Ramalingam Raju.
It may be recalled that last year Blackstone had backed out of a deal to invest in Hyderabad-based media group Ushodaya Enterprises’ owners of Telugu publication Eenadu as it was not receiving the mandatory clearance from the Foreign Investment Promotion Board (FIPB) and the Cabinet Committee of Economic Affairs (CCEA).
Before scrapping the deal altogether it had reportedly reduced the size of its original $275-million deal for picking a 26% stake in Ushodaya (announced in January 2007) to around 14% stake for Rs 590 crore or a little less than $150 million.
In fact, Blackstone also had a rethink on the deal as it saw valuations crashing in the media business and impending competition for Eenadu from unnamed channels (which was believed to be none other than Indira TV). Finally, Nimesh Kampani (ace I-banker and owner of JM Financial, the former partner of Morgan Stanley in India) had reportedly invested in Eenadu in his personal capacity.
2i Capital along with UBS controlled Pluri Emerging Companies, had picked up 27.79% and 5% of Sandur Power, respectively, during 2005-06 for an undisclosed amount. Pluri is reportedly facing an Enforcement Directorate probe over an alleged fraudulent transaction which involved routing of money raised abroad by two firms belonging to a leading industrial group in India through some diamond traders to play in the Indian stock market.
The investments made by 2i Capital and Pluri Emerging Companies also faced flak early this year when opposition political parties in the state alleged that the Andhra CM’s son violated FDI and foreign exchange norms.