ArchiveFebruary 2008

Taxation Issues in Short Selling

An earlier post on this blog had discussed the introduction of short selling in the Indian market and its implications on the market. Today’s Hindu Business Line has an article that refers to lack of clarify in the taxation regime with respect to short sales. Obviously, there seem to be several loose ends to tie, and the authors hope that the forthcoming Budget and the Central Bureau of Direct...

Corporate Governance Study

Research in areas of corporate governance involving Indian companies has not been substantial, compared to that in its emerging market counterparts such as China. However, a recent study that has been commissioned by the IFC Global Corporate Governance Forum in consultation with SEBI and the National Institute for Securities Markets (NISM) is likely to bridge the gap. Here are the excerpts from...

Should Insider Trading be Permitted?

An affirmative answer to this question will almost always be dismissed as outlandish. But, Henry Manne, who is considered the father of law and economics, has argued for deregulation of insider trading for the last 40 years. His ideas have encountered a barrage of criticisms from other legal scholars. Further, as far as I am aware, there is no jurisdiction around the world that consciously adopts...

Analysing Foreign Currency Exchangeable Bonds (FCEBs)

When it came to borrowings in foreign currency, Indian companies hitherto had two options, namely (i) external commercial borrowings (ECBs) where they borrow monies in foreign currency, or (ii) foreign currency convertible bonds (FCCBs) where they issue bonds denominated in foreign currency that are convertible into shares of the issuer company. About a week ago, the Ministry of Finance granted...

Indian Sovereign Wealth Fund: Now a Possibility

Sovereign wealth funds (SWFs) have become the flavour of the day. Not only are the SWFs of various countries investing billions of dollars in companies around the world, they are generating a significant amount of skepticism from regulators in host countries urging greater transparency.As far as India is concerned, initial indications from the Reserve Bank of India have implied reluctance on the...

Guest Contributor: Somasekhar Sundaresan

It is my pleasure to introduce our guest contributor, Mr. Somasekhar Sundaresan Practice Focus: Capital Markets, Securities Laws, Banking and Non-banking Financial Services and Mergers and Acquisition involving listed companies. Somasekhar has extensive experience and expertise in the practice and evolution of securities laws in India. While primarily a transactional lawyer, he is intensely...

Competition Act and Merger Regulation

Today’s Economic Times carries a column by Jaishree Vyavaharkar & David Jacobs of Baker & McKenzie analyzing the provisions of the Act and the recent draft regulations on business combinations, with specific reference to implications on foreign investors. Here are some excerpts: “A fundamental concern for foreign investors was the lack of domestic nexus in the Act. Effectively, deals...

Northern Rock: Bank Nationalisation

As the Economist reports, Britain’s Government has decided to nationalise the ailing Northern Rock Bank, after unsuccessful efforts to sell it to a private player. The strategy followed recently by the Reserve Bank of India in the case of ailing Indian Banks has been somewhat different. It has usually exercised its powers under the Banking Regulation Act, 1949 (Section 45) (with appropriate...

Stolen Information and Stock Trades: Is it Insider Trading?

This question has come up before the United States Court of Appeals for the Second Circuit, in New York. Interestingly, this involves stealing of information by hacking a computer system. Here are the brief facts as reported in the New York Times: “[T]he evidence indicates that on Oct. 17, 2007, someone hacked into a computer system that had information on an earnings announcement to be made by...

Guest Contributor: Gauri Manglik

It is my pleasure to introduce our guest contributor, Ms. Gauri Manglik. Gauri is an associate at Amarchand & Mangaldas & Suresh A. Shroff & Co. where her work includes capital markets, private equity and other corporate advisory work. Gauri graduated in the top 5% of the Masters of Law (LLM) class from the University of California – Los Angeles, specialising in corporate and...

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