Major music label Pony Canyon Inc., a key Nippon Broadcasting System Inc. subsidiary, may allot new shares to an investment fund set up by a group that includes the radio company, sources said Wednesday.

The fund was set up by Nippon Broadcasting, Softbank Investment Corp. and Fuji Television Network Inc. last month.

The plan is believed to be aimed at making Pony Canyon a nonsubsidiary of Nippon Broadcasting before Internet portal Livedoor Co. acquires management control of the radio broadcaster.

Softbank Investment intends to comply with the plan on condition that Pony Canyon formally agrees to go public, the sources said.

In the year that ended in March 2004, Pony Canyon contributed 54 percent to Nippon Broadcasting’s 110 billion yen in consolidated sales.

If it becomes a nonsubsidiary, Livedoor’s takeover of the radio firm would be significantly less lucrative.

The move stems from a series of maneuverings in a high-profile battle between Fuji TV and Livedoor for control of Nippon Broadcasting.

Livedoor so far has acquired more than 50 percent of outstanding Nippon Broadcasting shares.

Although director-level discussions between Fuji TV and Livedoor toward forging an amicable alliance have been going on since mid-March, Fuji TV sources said they have not yet seen the light at the end of the tunnel.

A senior Livedoor official said Wednesday the negotiations “will take till summer,” but the Fuji TV sources said their side would like to wrap up the talks as quickly as possible.

Softbank Investment has become Fuji TV’s largest shareholder by borrowing shares held by the radio broadcaster.

As part of the maneuverings, Softbank Investment, Fuji TV and NBS jointly set up a 20 billion yen fund to foster venture companies in image, music and other content businesses as well as media- and broadband-related services.

The plan to use the joint fund for Pony Canyon’s capital increase appears be to help Fuji TV extract concessions from Livedoor.

At present, Nippon Broadcasting has 56 percent of Pony Canyon’s 800,000 outstanding shares, while Fuji TV holds 27 percent.

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