Disinvestment by the Indian party from its JV / WOS abroad may be by way of transfer / sale of equity shares to a non-resident / resident or by way of liquidation / merger / amalgamation of the JV / WOS abroad.
(b) Can an Indian Party disinvest from JV / WOS without write off?
Yes, the Indian Party may disinvest without write off under the automatic route subject to the following:
the sale is effected through a stock exchange where the shares of the overseas JV/ WOS are listed;
if the shares are not listed on the stock exchange and the shares are disinvested by a private arrangement, the share price is not less than the value certified by a Chartered Accountant / Certified Public Accountant as the fair value of the shares based on the latest audited financial statements of the JV / WOS;
iii. the Indian Party does not have any outstanding dues by way of dividend, technical know-how fees, royalty, consultancy, commission or other entitlements and / or export proceeds from the JV or WOS;
the overseas concern has been in operation for at least one full year and the Annual Performance Report together with the audited accounts for that year has been submitted to the Reserve Bank;
the Indian party is not under investigation by CBI / DoE/ SEBI / IRDA or any other regulatory authority in India; and
other terms and conditions prescribed under Regulation 16 of the Notification ibid.
(c) Can an Indian Party disinvest from JV / WOS involving write off?
Yes, an Indian Party may disinvest, under the automatic route, involving write off in the under noted cases:
where the JV / WOS is listed in the overseas stock exchange;
where the Indian Party is listed on a stock exchange in India and has a net worth of not less than Rs.100 crore;
where the Indian Party is an unlisted company and the investment in the overseas JV / WOS does not exceed USD 10 million; and
where the Indian Party is a listed company with net worth of less than Rs.100 crore but investment in an overseas JV/WOS does not exceed USD 10 million.
(d) Are there any additional pre-conditions/compliances subject to which such write off at the time of disinvestment is permitted?
Yes. Item (i) to (vi) under part (b) of this question.
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