'Indian legal system a cause for concern for investors'

The Indian legal system is one of the roadblocks and a big cause of worry for the investors, said M Damodaran, former chairman, Securities and Exchange Board of India (Sebi).

“They (investors) are not sure or clear whether legislations in the country will remain the same or change in the long run,” he said, adding that there were two major distortions in the country, including the Group of Ministers. The Parliament also needs to legislate fast, he said.

“The banking amendment Bill, which I was instrumental in drafting in 1996-97, is still pending for approval. Many other bills have queued up since then, Damodaran said during the inauguration of the Chennai office of leading legal firm Amarchand Mangaldas.

Bharat Vasani, chief legal and group general counsel, Tata Group, said there was a feeling of despondency about judicial system and political parties.

Several projects, including steel projects, are stuck due to land issues. This has forced the Tata group to de-risk by going outside India, he said.

“Three or four large projects of Tata Group were struck due to land issues. This resulted the Group to look at outside India. As part of our de-risking plan, the Group decided to set up plants or acquire outside India, though it will be a primary one.”

He noted that currently 60 per cent of the Group's business was coming from outside India.

On the reforms, he said key economic reforms like retail FDI were expected once the presidential elections are over.

Dorothy Thomas, partner and office head, Amarchand Mangaldas, Chennai, said strategic investors were looking at single-brand retail, e-commerce and real estate keenly.