The Life Insurance Corporation of India (LIC) has done away with the post of chairman. LIC will now have a post of chief executive officer and managing director. This announcement comes at a time when the government is introducing changes to relevant rules ahead of the corporation's mega initial public offer(IPO).
The department of financial services under the finance ministry has made this change to the top-most post at LIC. It has done so by amending Life Insurance Corporation of India (Employees) Pension (Amendment) Rules. Apart from this, some other rules under LIC Act, 1956, have also been amended.
"Chief executive and managing director means the chief executive officer and managing director appointed by the central government under section 4 of the Act (LIC Act 1956)," according to a gazette notification issued on July 7.
To facilitate the Life Insurance Corporation's IPO, the government had given its nod to raising the insurance behemoth's authorised share capital to Rs 25,000 crore. Recently, the Department of Economic Affairs under the finance ministry had also amended the Securities Contracts (Regulation) Rules.
As per the latest amendment to the Securities Contracts (Regulation) Rules, companies that have a market capitalisation of more than Rs 1 lakh crore at the time of listing are restricted to selling just five per cent of their shares. This move is expected to benefit LIC during its initial public offer, PTI reported.
Such companies will be required to increase their public shareholding to 10 per cent in two years and raise the same to at least 25 per cent within five years.
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