An earlier post on this blog noted the concerns of the industry relating to the merger regulations proposed by the Competition Commission and also certain comments made by the acting chairman of the Competition Commission of India to allay any fears of the industry. The proposed draft of the Competition Commission of India (Combination) Regulations, 200_ that deal with merger regulation were made...
IPOs: Listing Day Price Band
Initial public offerings by companies are beset with the aspect of what is known as ‘underpricing’. This is when companies accessing the capital markets for the first time experience a significant jump in the stock price on the first day of trading. This works to the advantage of investors who have been allocated shares in the IPO, as they benefit from selling the shares on the first day of...
Faith-Based Indexes on Dow: For Hinduism and Buddhism
The Prime Newswire reports that Dow Jones Indexes and Dharma Investments, a leading private investment firm pioneering the development of faith-based investment have launched the Dow Jones Dharma Indexes. The new indexes measure the performance of companies selected according to the value systems and principles of Dharmic religions, especially Hinduism and Buddhism. The report adds: “To be...
Competition Commission and Merger Regulation
The Competition Commission is working on the draft of the Competition Commission (Combinations) Regulations, which are expected to be announced shortly. Due to concerns from the industry regarding these regulations operating as a serious hurdle to M&A activity in the country, there are indications that the Competition Commission will introduce provisions in the draft regulations that are...
Stoneridge: US Supreme Court Limits Scope of Securities Law Suits
BackgroundA significant decision in the area of securities laws was handed two days ago by the US Supreme Court in the case of Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc. In its judgment (available here), the court (by a 5:3 majority) held that private actions for securities fraud (under Section 10(b) of the Securities Exchange Act, 1934) are not allowed against third parties...
Indo-Mauritius Tax Treaty: Benefits to Stay
Indications are that the Double Taxation Avoidance Treaty between India and Mauritius will stay despite pressure from the Indian tax authorities. In fact, the Treaty may be strengthened to withstand repeated scrutiny from the Indian tax authorities. The Economic Times reports: “The controversial double tax avoidance treaty between India and Mauritius is likely to survive despite pressure from the...
Comparative Corporate Governance (Part II)
Continuing from the previous post on this topic: 4. The Convergence vs. Divergence DebateThe dominance of managers over shareholders in the US, the role of institutions in the UK, that of banks and labour unions in Germany, the existence of complex cross holding structures in East Asia (such as chaebol in Korea and the keiretsu in Japan), state-owned enterprises in China and finally family-owned...
Comparative Corporate Governance (Part I)
There have been some recent developments (particularly studies) in the area of comparative corporate governance that are noteworthy. Some of them concern India directly, while others are international but could provide valuable lessons for India. 1. Comparative Studies of Corporate Governance Across Countries The Race to the Bottom blog (which is a US law professional – faculty – student...
Will We Witness an Indian Sovereign Wealth Fund?
Sovereign Wealth Funds (SWFs) have become the flavour of the day. The business press regularly reports investments (usually running into several billions of dollars) by the sovereign wealth fund of one or the other country into companies of located in yet another country. Several US financial companies embattled by the subprime crisis have been the largest recipients of investments by SWFs. For a...
Paving the Way for Short Selling in the Indian Market
Background At the outset, it may be useful to provide a brief background on the concept of short selling and its related jargon in very simple (and non-financially savvy) terms. Short selling is a sale of shares by a person without actually owning those shares. What occurs is that the seller borrows shares from someone else that actually owns the shares (let us call that person a lender) and then...
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