NRI Problems: Why the LIC IPO is taking quite a while

Dubai - With a public offering of this size, several options are being considered

All NRIs are waiting for the initial public offering of Life Insurance Corporation of India. The announcement was made several months ago by the finance minister but no concrete steps seem to have been taken so far. It is expected that this IPO will be a game changer for the Indian capital market.

Several options are being considered. One of the options is to sell to large institutions before the IPO opens which would include selling to cornerstone investors just before the public offering. So far in 2021, more than 25 IPOs of other reputed companies have absorbed nearly ₹700 billion. The LIC IPO is expected to mobilise around ₹1 trillion for the government.

It is possible that this offer may be split into two consecutive offerings with a gap of a few months as it may not be possible for the market to absorb the entire issue in one offering. It is, therefore, expected that by early next year at least the first part will go through.

As an NRI who is a resident in the Gulf, can I take up independent directorship of a publicly-listed firm in India?

Non-resident Indians as well as foreign citizens can be appointed as independent directors of publicly-listed companies. They would be entitled to fees for attending every board meeting or a meeting of committee of directors, as well as reimbursement of travelling expenses. In addition, some companies pay commission to independent directors aggregating to one per cent of net profits. To ensure that such directors are truly independent, it is now provided with effect from January 1, 2022, that the reappointment and removal of independent directors in a listed company will be done only through a special resolution of the shareholders.

For this purpose, the number of votes in favour of the resolution should be at least three times those against the resolution. This will ensure that independent directors are not appointed or removed at the whims and fancies of the promoters. A new independent director will first be appointed by the board of directors and such appointment will have to be approved by the shareholders at the immediately following annual general meeting of shareholders.

I have an old car lying in India for several years. I wish to get rid of it at scrap value. However, I am not sure whether the registration of the vehicle in my name will be duly cancelled. I believe this is a serious problem faced by many persons who simply abandon their cars on roads.

The government is devising a policy for scrapping of old vehicles. State governments will have to adopt the model guidelines issued by the central government. The transport department will authorise scrapping centres so that private car owners whose vehicles are more than 20 years old would be able to hand over the car to the authorised vehicle scrapping centre.

The scrapping process will be digitised with CCTV cameras filming the process. The chassis number will first be removed before the scrapping process starts, which will help in deregistering the car. The data of the vehicle will be uploaded on the government portal and deregistering the car will be done on the same day. The final certificate for scrapping and deregistration will be sent to the owner digitally.

H.P. Ranina is a practicing lawyer, specialising in tax and exchange management laws of India

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