ArchiveAugust 2008

An Exotic Precedent in Partnership Law

Straying beyond Indian borders and also into partnership law territory, here is a link in a lighter vein to a post on Ideoblog:“We don’t usually think of Jerry Seinfeld as an authority on partnership law, but a very recent Maryland case reveals this other side.”Enjoy that post.

Speedier Enforcement of Large Contracts on the Anvil

Business Standard reports that the Government is considering a new law for the faster enforcement of high-value business contracts. This is to enhance the environment in India for business transactions. The principal driver behind this move is stated to be the low scores India has received on this count in the Doing Business Report published annually by the World Bank. The Business Standard...

Reforming Indian Company Law

After a prolonged wait, far-reaching reforms are finally underway in relation to the Companies Act, 1956. The Union Cabinet yesterday gave its approval to the Companies Bill, 2008 which is set to introduce a comprehensive revision of the Companies Act. Though the Companies Act (enacted in 1956) essentially tracked the then existing English company law, and although the Act has undergone a great...

Indian stock markets

I just came across an interesting article in MoneyLife, where Debashis Basu traces the ups and downs of the Indian stock markets – He states that during the boom in 1994-95, there were 1400 IPOs in a year! That sounds absolutely unbelievable now – considering 2007 was the big hit year with just 90 IPOs!The gist of the article is reflected in this paragraph of the article:“Of the...

Governance Trends Among Indian Conglomerates

In a column in the Financial Express, Rajesh Chakrabarti sets out some observations regarding corporate governance trends that are affecting Indian companies (particularly conglomerates), based on academic research. These include concentrated ownership (even among large listed companies), lower than desired levels of board supervision, earnings management and the skewed nature of executive...

Endemic Delays with Takeover Offers

The Hindu Business Line has published an interesting news story in its edition dated August 24, 2008 about delays in clearing open offers made under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (“Takeover Regulations”).Chronic delays in clearance of open offers are leading to M&A activity in India in the listed space being rendered unpredictable. Worse...

Legal Practices and Public Ownership

We have previously discussed on this blog (here and here) the phenomenon whereby law firms could undertake transactions such as public offering of securities and buyouts. The current issue of The Economist carries a column on this topic. Here is an extract:“Investing in law firms is more than just a pipe dream. A change in British law, introduced last year, enables law firms to use business...

The Impact of Status Quo on Participatory Notes

Last week, there was expectation that SEBI would make some announcements regarding issuance of participatory notes (P-notes) by foreign institutional investors, particularly that curbs on P-notes will be removed. However, no decision was taken by SEBI and it was decided to defer the matter.In an editorial, the Financial Express comes out very strongly in favour of removal of all restrictions...

Reverse Burden upon Exporters under FERA

(The following post has been contributed by Venugopal Mahapatra and Gautam Bhatia)A recent judgment of the Supreme Court addressed a few important questions with regard to the imposition of reverse burden under the Foreign Exchange Regulation Act (FERA). In the case of Seema Silk and Sarees and Anr. v. Directorate of Enforcement and Ors., decided in June 2008, the constitutional validity of...

Revisiting the Foreign Venture Capital Regime

In a previous post on this blog about four months ago, we had extolled the virtues of an economy possessing a favourable venture capital regime. We had also highlighted some of the progressive developments in the Indian venture capital market that were induced by favourable regulations issued by SEBI and RBI.However, the perception of regulators in respect of venture capital firms (especially the...

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