ArchiveNovember 2008

Supreme Court on ‘Allotment of Shares’ and ‘Issue of Bonus Shares’

In a recent judgment (Khoday Distilleries v. CIT, Civil Appeal 6654/2008, judgment of 14 November 2008), the Supreme Court explained some important corporate law concepts. The issues before the Supreme Court arose out of a matter under the Gift Tax Act, 1958; and the Supreme Court had to elaborate upon the nature of an allotment of rights issue. In the facts of the case, twenty out of the twenty...

Condolences

We would like to express our sincere condolences to all those who have been affected by the recent events in Mumbai, which have left the world in shock and disbelief.We, at this Blog, indeed have a very close connection with this city. Not only is Mumbai the financial capital of India and the nerve centre for Indian corporate law, but it is home to a significant number of our readers as well as...

Paper on Capital Flows into India

The RBI has published a paper by its Deputy Governor, Rakesh Mohan, titled “Capital Flows to India”. Although it approaches the topic predominantly from an economy and policy standpoint, it is also helpful in identifying the different types of flows (debt and equity) and carries a historical account of capital flows since liberalisation in 1991.

Minimum Pricing Norms Eased for GDRs/FCCBs

In yet another move to boost the capital markets, the Government has relaxed the minimum pricing norms for the issue of securities (being GDRs/ADRs/FCCBs) to foreign investors. This comes on the heels of similar relaxations provided to qualified institutional placements (QIPs) some weeks ago.There are two changes proposed:(i) the minimum price will be the average weekly high and low prices for...

A New Theory of Commercial Disparagement

An earlier post had noted recent decisions of the Delhi High Court on the issue of comparative advertising and commercial disparagement. It is becoming increasingly commonplace today to see advertising battles fought out in Courts. A recent decision of the Madras High Court, however, has substantially changed the law on the point – Colgate Palmolive v. Anchor Health and Beauty Care Pvt. Ltd...

Rating the Raters

Even since the subprime crisis erupted last year, there has been an extensive debate about the role of credit rating agencies in exacerbating the crisis. Questions have been raised whether the rating agencies ought to have raised the red flag much earlier than they actually did, thereby protecting the interests of investors who placed reliance on their reports.The debate over rating agencies...

Difficulties in Insider Trading Actions

One usually tends to lament that the Indian securities regulator, SEBI, has been unsuccessful yet in its prosecution of insider trading cases. Several high profile cases were initiated by SEBI only to be overturned by the appellate authorities. This tends to be on account of the fact that insider trading cases are difficult to prove.A new case initiated by the Securities and Exchange Commission...

Daga Capital – A decision with implications for trade in shares and securities

In a case decided less than a month back, a special (3 member) bench of the Bombay ITAT considered and decided a number of tax issues arising with respect to entities dealing in shares and securities. Given the considerable attention devoted on late to financial institutions and mutual funds, this decision is one of enormous significance. The Bench considered three appeals together, one by the...

Listed Government Companies and Corporate Governance: A Supplement

A previous post on this Blog by Mr. Jayant Thakur raises valid issues regarding corporate governance and government-owned companies. Although I am in agreement with the position stated, it may be useful to highlight certain other complexities this matter gives rise to. I initially began by writing a comment to his post, but owing to its length, decided to post it separately as a supplement. Here...

Listed Government Companies – Violations of Corporate Governance requirements – early orders of SEBI

Gail, ONGC, Indian Oil Corporation, etc. have, as per Orders of Adjudicating Officer (see, e.g., Indian Oil order here and others available on SEBI site) allegedly violated Clause 49 of the Listing Agreement since they allegedly delayed the appointment of Independent Directors. These orders are perhaps of the earliest of orders of adjudication of violation of requirements in relation to Corporate...

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