1. Number of IPOs in November

In November 2023, ten Indian companies raised about ₹13,000 crore through main board IPOs.

a.Tata Technologies Ltd- Oversubscribed 69.43 times by Retail Investors. The offer price of Rs.500/- listed on debut day at Rs.1400.
b.Indian Renewable Energy Development Agency Ltd – Oversubscribed 38.8 times by Retail Investors. The offer price of Rs.32 was listed on debut day at Rs.50.
c.Gandhar Oil Refinery (India) Ltd – Oversubscribed 28.95 times by Retail Investors. The offer price of Rs.169 was listed on debut day at Rs.295 at BSE and 298 at NSE.
d.Fedbank Financial Services Ltd- Oversubscribed 1.81 times by Retail Investors. The offer price of Rs.140 was listed on debut day at Rs.138.
e.Flair Writing Industries Ltd- Oversubscribed 9.36 times by Retail Investors. The offer price of Rs.304 was listed on debut day at Rs. 501.

2. NFRA has retrospective jurisdiction

NCLAT held that the National Financial Reporting Authority (NFRA), an agency set up in October 2018 for oversight over auditors of large corporates and listed entities on disciplinary matters, over ICAI has retrospective jurisdiction in initiating proceedings against errant CA for a period prior to formation. NCLAT further held that in important and serious matters especially involving large alleged accounting or financial frauds or matters of public interest, etc. NFRA has the power to suo-moto initiate an investigation.

Earlier this year, NFRA said that resignation does not absolve an Auditor of his responsibility to report fraud.

3. Law to emphasize Justice and not Penalty

Mr. Amit Shah, Home Minister had introduced the replacement Bills for three crime laws namely the Indian Penal Code, Code of Criminal Procedure, and the Indian Evidence Act giving these laws, new Hindi names like Bhartiya Nyaya Sanhita, Bhartiya Nagrik Suraksha Sanhita and Bhartiya Sakshya Adhiniyam respectively.

The Parliamentary Standing Committee on Home Affairs adopted the draft reports with several changes, including:
a.Gender-neutral adultery law
b.Reduction in punishment of jail term u/s 353 of the Indian Penal Code
c.Punishment of non-consensual sex irrespective of gender
d.A mandatory jail term of a minimum of 6 months and an increase in fine for adulteration of food and drink intended for sale.

4. Roaring demand of CLO (Chief Legal Officer)

India Inc. faces a shortage of in-house legal experts, and a Chief Legal Officer (CLO) due to constantly changing regulations. Prioritizing governance in ESG is vital, and supporting independent directors highlights this talent gap. Adhering to changing regulations requires a strategic approach to compliance, ethical operations, transparent disclosures, and retaining talented individuals.

The CLO needs a good understanding of law and technology. He/ she guides the company’s vision with ethical practices. The role involves legal know-how and integrating technology, stressing the need for a broad skill set. The CLO is crucial for aligning legal and ethical aspects, ensuring the company follows the law in spirit embedded with values that the company believes and stands for.

The demand for CLOs extends beyond large corporations; startups also seek their expertise to establish governance, and ethical practices, and build a robust foundation for sustaining a brand.

5. India & Australia Exchanged MoU

India and Australia exchanged 5 MoUs on joint Research and Development between the institutes in the two countries at the inaugural Australia India Education and Skill Council
(a forum for academia, industry, and government to collaborate in deciding major bilateral priorities) meeting held in Gandhi Nagar, Gujarat. Two Australian universities setting up campuses at GIFT City and providing opportunities to Indian students, who cannot afford to go to Australia to pursue higher education.

The MoU included a consortium-to-consortium collaboration proposed between 7 Australian Universities to their Indian counterparts to pave the way for in-country delivery of degrees in India. Currently, more than 1 lac Indian students are studying in Australia.

Deakin University will set up the first foreign campus in India at Gift City and signed an MoU with the Indian Institute of Technology Gandhinagar (IITGN) to collaborate in science and innovation.

AustraliaMOU.pdf (education.gov.in)

6. Governance issues when Family battles reach the boardroom

Family disputes, once confined behind closed doors, now spill into boardroom conflicts. The spotlight intensifies on women in the boardroom amid familial discord. Increased education, capabilities, and changes in succession and corporate laws propel women’s greater involvement. Women on boards have transitioned from passive figures to assertive contributors, breaking free from symbolic roles. They actively engage, bringing meaningful contributions to the boardroom rather than serving as mere symbols.

Few past incidents have shown that investors may suffer in a prolonged family feud, resulting in languishing share price and erosion of shareholder value.

In the events of family disputes or matrimonial disputes, the role of Independent Directors (IDs) and regulators is of prime importance to protect the wealth of stakeholders. ID has a vital role in promoting corporate governance, and ethical conduct, ensuring strict compliance and controls, and resolving conflicts fairly and equitably. IDs can guide and support the management team to ensure that the company’s operations continue smoothly during the dispute. They can also help maintain investor confidence and prevent any adverse impact on the company’s reputation, financial performance, and shareholders’ value.

There are over 6,800 listed companies with a combined market capitalization exceeding $2.6 trillion, according to a World Bank report. Many of them are promoter-driven and family-owned.  Indian corporate history is replete with conflicts between brothers (Kirloskars of Kirloskar Group or Chabbrias of Finolex Group), fathers and sons (Raymonds and Wadias), or the very recent example of Hikal between a brother and sister. Recently with the amendment in SEBI Listing Regulations, there are family dispute settlement agreements disclosed to the Stock Exchanges by Murugappa Group, Hero Motor Corp, and DCM. Such disputes may be for the shareholding rights, representation on the board, amalgamation, and rights to engage in a particular business activity. Breaks up and disputes potentially turn into Boardroom Disputes.

Recently in November 2013, Gautam Singhania, CEO of Raymond announced his separation from his wife Nawaz Modi Singhania, following which Nawaz Modi asked for 75% of his $1.4-billion personal wealth for herself and their two daughters. Nawaz Modi alleged that she and her daughter were physically assaulted by Gautam Singhania in September 2023. She also alleged that company funds were being used for Singhania’s personal benefit (CEO excesses) and that she was acting as a whistle-blower of sorts. Nawaz sits on the Board of half a dozen companies including Raymond. Following this the proxy advisory firm Institutional Investor Advisory Services (IiAS) asked the IDs of Raymond to launch an investigation into the allegations of assault made against Singhania by his estranged wife.

The Independent Directors of Raymond on December 01, 2023, said that they have hired an independent senior legal counsel to advise the company amid the ongoing marital dispute. In a stock exchange filing, IDs said that they are alert about the situation and will take action in this regard. The IDs further said that neither the law nor any corporate governance standard requires the ID to enquire into, investigate, or delve into the merits or otherwise, of such matrimonial disputes, which lie beyond the remit of the ID. However, the IDs stated that they shall continue to exercise utmost vigilance in watching the evolving situation and shall not hesitate to proactively initiate measures, at the moment required, to protect the interests of all stakeholders.

While the law lays down broad contours, regulators, MCA and SEBI, should frame regulations for such companies as to how efforts must be undertaken to protect the interests of minority shareholders. Regulators too, should play their part in facilitating the induction of reputed IDs on the boards and framing a right set of regulations that help IDs act in such a manner.

While the law provides a general framework, regulators like MCA and SEBI should establish specific regulations for companies. These regulations should outline measures to safeguard the interests of minority shareholders in the event of family disputes. Regulators also need to actively facilitate the appointment of reputable independent directors and formulate regulations that empower them to fulfill their roles effectively.

The OECD Guidelines emphasize that the remedy for family-run organizations lies in a Board that executes traditional management oversight functions. This Board should assist management in delineating and pursuing the company’s strategic direction, ensuring alignment with the interests of various investors. Such Family Businesses should have a new management model with the adoption of high standards of corporate governance practices, based on three pillars family control, professional management, and partnership with the capital market.

7.News from OpenAI of Mr.S A Altman

OpenAI is an American artificial intelligence (AI) research organization consisting of the non-profit OpenAI, Inc. registered in Delaware in the USA and its for-profit subsidiary is  OpenAI Global, LLC. On November 17, 2023, OpenAI’s board abruptly announced that co-founder and CEO Sam Altman was out, effective immediately stating the reason that it had no confidence in Altman’s leadership. About 738 of OpenAI’s 770 employees, including Murati, the CEO, signed an open letter stating they would quit their jobs and join Microsoft if the board does not re-hire Altman as CEO and then resign. Investors considered taking legal action against the board members in response to potential mass resignations and Altman’s removal. After some negotiations, Altman returned, along with president Greg Brockman, while Murati is returning to her role as the company’s CTO. The deal also includes a new set of board members, which now will include representation from Microsoft.

Due to OpenAI’s ownership structure, its control lies with the non-profit parent – this is unlike a typical venture capital (VC) backed company. The non-profit holds humanitarian interests above sole investor interest and thus it is employees and not investors who could hold the most sway on the board, legal experts told media agency.

Source- Wikipedia and OpenAI’s investors may take legal action against the board for Sam Altman’s firing: Report | Mint (livemint.com)

8. Cricket – Final World Cup Match – 19 November 2023

Team India led by Rohit Sharma lost the last game against Australia in the final of the ODI World Cup on Sunday, November 19. The match took place at the Narendra Modi Stadium in Ahmedabad, and Australia, led by Pat Cummins, won by six wickets to secure their sixth ODI World Cup title. In the big game, India batted first after being invited by Australia and scored 240 runs in 50 overs. Australia had a hard time early in their innings, losing 3 wickets quickly. However, thanks to Travis Head’s 137 runs and a partnership of 192 runs with Marnus Labuschagne for the fourth wicket, Australia managed to chase down the target of 241 runs and win the game in 43 overs. This defeat was very disappointing for Indian fans.

The Cricket World Cup final underscored the sport’s unpredictability. Despite consistent performance, one off day can lead to defeat. It served as a poignant reminder that in cricket, as in life, resilience and the ability to rebound from setbacks are crucial for success. Occasional setbacks highlight the significance of continuous improvement and learning from defeats to achieve long-term success.

9.WHO set up a panel to combat loneliness

The World Health Organisation (WHO) has appointed US Surgeon General Vivek Murthy and African Union youth envoy Chido Mpemba as Co-chairs of an International Commission to address the issue of loneliness which is a global threat. The Commission will work towards outlining solutions over three years to build social connections.

In a recently released report titled “Our Epidemic of Loneliness and Isolation” US Surgeon General Vivek Murthy stated that the mortality impact of being socially disconnected is like smoking up to 15 cigarettes a day.

Loneliness, a state of mind, should be distinguished both from social isolation, an external experience of reduced social contact, and from social exclusion. Living alone, although possibly a contributory factor to social isolation and loneliness, should not in any way be conflated with loneliness. A person can be alone but not lonely as he or she may have a strong connection within or a purpose for living. There could be social loneliness and emotional loneliness. Any kind of loneliness is associated with depression and it needs professional help.

Indian culture, rich in Yoga, religious, and spiritual practices, empowers individuals to combat loneliness. Engaging in these activities fulfills one’s life by addressing mental, physical, and spiritual needs. The holistic approach promotes well-being, creating a harmonious balance that contributes to a fulfilling and enriched existence.

Some suggestions to overcome loneliness at an early stage
a.Befriending
b.Participate in Art and Cultural activities
c.Developing Hobby
d.Volunteering
e.Physical activities and change in lifestyle
f.Join a program of Budding or mentoring
g.A tech-based intervention like the use of video conference facilities
h.Travelling or going near nature
i.Writing messages for next generation
j.Finding WHY for the purpose of life