The report, prepared by GIC chairman Sengupta at the instance of the finance ministry, has projected a profitability of $156.9 million after seven years from the overseas operations following the restructuring.

The report, which will be implemented by the GIC in consultation with other subsidiaries, has identified six centres with a regional headquarters for setting up strong operations across the world. The report has suggested that Bahrain should the headquarters for the Middle East, Southeast Asian region (with an investment of $15 million), Thailand or Hong Kong for the Far East (investment: $15 million), Australia or New Zealand for the FarEast Asian region (investment: $25 million), Mauritius for Mauritius and Madagascar, which can be further be expanded to include South African markets (investment: $5 million), UK for the UK, Canada, France which can further be expanded to include Europe (investment: $85 million) and Trindad & Tabago or Bermuda as the headquarters of the Caribbean islands (no investment). In a bid to centralise the coordination of the overseas operations, the report has proposed the setting up of Indian International Overseas Ltd. New India -- with the largest number of foreign offices among the GIC subsidiaries -- and other GIC companies will participate as joint venture partners in the proposed locally incorporated company.

It is proposed that wherever considered appropriate the capital could also be mobilised from prominent domestic businessmen/houses, local public sector undertakings operating in a particular territory, leading insurance companies like Tokyo Marine, GIO, India International, Life InsuranceCorporation and Indian banks.

Subject to local laws, the report recommends that the GIC group should retain 70 per cent stake with the balance shareholding coming from local partners having sound financial strength. However, the management control will be with New India, it said. This is feasible in overseas centres like Hong Kong, Australia, New Zealand, Mauritius, Europe, Aruba and Curacao wherein local laws provide for 100 per cent foreign ownership. However, in the Middle East (Bahrain as well as Thailand), local laws stipulate foreign holding at 49 per cent with local shareholding at 51 per cent. The report has suggested that to maintain the management control, the New India Assurance should pick up local partners with sound financial strength offering them stakes between 5 and 10 per cent. This way, even with a 49 per cent stake, the company will enjoy the management control since the possibility of various small local partners joining together is remote.