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TMI BlogSubstitution of section 4.X X X X Extracts X X X X X X X X Extracts X X X X ..... o be nominated by the Central Government; (d) not more than two individuals, to be nominated by the Central Government, who have special knowledge or practical experience in actuarial science, business management, economics, finance, human resources, information technology, insurance, law, risk management, or any other field the special knowledge or practical experience of which would be useful to the Corporation in the opinion of the Central Government or who represent the interests of policyholders; (e) where the total holding of members other than the Central Government in the paid-up equity capital of the Corporation is-- (i) not more than ten per cent., one individual; (ii) more than ten per cent. but not more than twenty-five per cent., two individuals; and (iii) more than twenty-five per cent., three individuals, elected by such members in such manner as may be specified by regulations, to be appointed by the Board; (f) such number of independent directors, not exceeding three, to be recommended by the Nomination and Remuneration Committee and appointed by the Board; (g) at any time when the number of directors to be elected under clause (e) is less than three, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch an individual as a director shall have no financial or other interest as is likely to affect prejudicially the exercise or performance by him of the functions of a director: Provided that the Board shall satisfy itself from time to time with respect to every director other than a director nominated under clause (c) of sub-section (2) that he has no such interest: Provided further that, for the purposes of this subsection, any individual who is, or whose appointment or nomination or election is proposed and who has consented to be a director, shall furnish such information as the Central Government or the Nomination and Remuneration Committee or the Board, as the case may be, may require. (6) Notwithstanding anything contained in sub-section (2), on and from the appointed date, an individual appointed under section 4 who is eligible to be or remain a director under section 4A and who, immediately before such appointed date, held the office of a member of the Corporation- (i) in the capacity as the Chairman of the Corporation, shall be deemed to be a director and the Chairperson under clause (a) of sub-section (2); (ii) in the capacity as a Managing Director of the Corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted under section 408 of the Companies Act, and the order is in force; (f) he has been convicted of the offence dealing with related party transactions under section 188 of the Companies Act or under any other law for the time being in force during the preceding five years; (g) he has not paid any calls in respect of any shares of the Corporation held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of such call; (h) he has not complied with the provisions of subsection (i) of section 165 of the Companies Act; (i) he is disqualified from being appointed as a director of a company under sub-section (2) of section 164 of the Companies Act; (j) he is a salaried government official, other than an individual nominated director under clause (c) of subsection (2) of section 4; (k) he is an insurance agent or an intermediary or an insurance intermediary; (l) he is an employee of the Corporation, other than the Chairperson or a Managing Director, or of its subsidiary or associate company; (m) he is a director of a subsidiary or an associate company of the Corporation and is other than the Chairperson or a Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... becomes concerned or interested, or at the first meeting of the Board held after he becomes so concerned or interested. (3) A contract or arrangement entered into by the Corporation without disclosure under sub-section (2) or with participation by a director who is concerned or interested in any way, whether directly or indirectly, in such contract or arrangement, shall be voidable at the option of the Corporation. (4) Such employees as the Board may specify as constituting the senior management of the Corporation shall make disclosures to the Board relating to all material, financial and commercial transactions, in which they have personal interest that may have a potential conflict with the interest of the Corporation, and the Board shall formulate a policy on such transactions, including any materiality threshold therefore, and shall review such policy at least once every three years. Explanation.-For the purposes of this sub-section, conflict of interest relates to dealing in the shares of the Corporation or any of its subsidiaries or associate companies, commercial dealings with bodies in which the senior management individual or his relatives have shareholding, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided also that the requirement of approval under the first proviso shall not be applicable for transactions entered into between the Corporation and its wholly owned subsidiary, if any, whose financial statements are consolidated with the Corporation and placed before the members at the general meeting for adoption. Explanation.-In this sub-section,- (a) the expression "office or place of profit" means any office or place- (i) where such office or place is held by a director, if the director holding it receives from the Corporation anything by way of remuneration over and above the remuneration to which he is entitled as director, by way of salary, fee, commission, perquisites, any rent-free accommodation, or otherwise; (ii) where such office or place is held by an individual other than a director or by any firm, private company or other body corporate, if the individual, firm, private company or body corporate holding it receives from the Corporation anything by way of remuneration, salary, fee, commission, perquisites, any rent-free accommodation, or otherwise; (b) the expression "arm's length transaction" means a transaction between two related parties that is con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Civil Procedure, 1908 (5 of 1908.) while trying a suit, to summon and enforce the attendance of any person and examine him on oath and to require the discovery and production of documents or other electronic records, and shall be deemed to be a civil court for purposes of Order XXI of the Civil Procedure Code, 1908 (5 of 1908.). (4) A director or employee aggrieved by any order made by the adjudicating officer may prefer an appeal to such officer to the Central Government of a rank higher than that of the adjudicating officer as the Central Government may appoint as appellate authority, within thirty days from the date on which a copy of the order made by the adjudicating officer is received by the aggrieved individual, and the officer so appointed may, after giving the individual an opportunity of being heard, pass such order as he may deem fit, confirming, modifying or setting aside the order appealed against, or remanding the case to the adjudicating officer for disposal, with such directions as he may deem fit. (5) Where a director or employee of the Corporation having already been subjected to penalty under this Act for any contravention or violation of any provision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and adjudication of penalties for contravention or violation liable to penalty under the LIC Act, in order to bring the provisions relating to corporate governance in alignment with listing requirements. It is also proposed to substitute section 5 of the LIC Act, to provide for LIC's capital, issue of equity shares to the Central Government in consideration for paid-up equity capital provided by the Central Government to LIC before the coming into force of the new section, application of premiums received on issue of LIC's shares, increase or reduction of share capital by the Central Government, making of reservation on a competitive basis in favour of LIC's life insurance policyholders who may be offered shares at a price lower than that offered to public, eligibility of all LIC shares acquired by the Central Government during three years preceding an initial public offer for computation of minimum promoter's contribution and of all fully paid-up equity shares of LIC held by the Central Government for an offer of sale by way of an initial public offer notwithstanding any ineligibility for such computation or any condition for a minimum holding period under any law for the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 4A. It is also proposed to insert new section 23A in the LIC Act, to provide for annual general meeting and other general meetings of registered shareholders of LIC, in order to bring the provisions relating to the rights of LIC's shareholders in alignment with listing requirements. It is also proposed to substitute section 24 of the LIC Act, to provide for LIC having a multiplicity of funds, establishment of reserves and maintenance of separate funds for participating and non-participating policyholders of LIC, which are matters incidental to the proposed new sections 28, 28B and 28C. It is also proposed to insert new sections 24A, 24B, 24C and 24D in the LIC Act, to provide respectively for books of account, financial statements, Board's report and penalties for contravention by person charged with the duty of complying with the provisions of new sections 24A or 24B or 24C, in order to bring the provisions relating to the integrity of LIC's accounting and financial reporting systems, control systems and compliance with the law and relevant standards in alignment with listing requirements. It is also proposed to substitute section 25 of the LIC Act, to provide for app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board and committees thereof, or in appointment or nomination of directors, will not invalidate their acts or proceedings, which are matters incidental to the proposed creation of the Board and its committees under the proposed new sections 4, 19, 19A, 19B, 19C and 19D. It is also proposed to substitute section 47 in the LIC Act, to provide for protection of action taken by a director other than a whole-time director, which are matters incidental to the provision for independent, elected and other categories of non-whole-time directors under the proposed new section 4. It is also proposed to amend sub-section (2) of section 48 of the LIC Act, to provide for making of rules by the Central Government relating to various matters that are either incidental to or consequent upon the various other amendments proposed in this Part. It is also proposed to amend section 49 of the LIC Act, to provide for making of regulations by the Board of LIC relating to various matters that are either incidental or consequent upon the various other amendments proposed in this Part. It is also proposed to insert new sections 50 and 51 in the LIC Act to provide for the form, manner, etc. for companies ..... X X X X Extracts X X X X X X X X Extracts X X X X
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