An earlier post had noted that a recent decision of the Bombay ITAT could significantly affect the taxation of shares and securities, and group companies generally. To briefly summarise, it was a case involving a company dealing in shares and securities. It claimed that the interest it incurred on loans taken to finance the purchase of shares was deductible, although its dividend income was...
A different perspective on the six-month ban on contra transaction under Insider Trading Regulations
On December 5, 2008, a comment on the recent amendments to the SEBI (Prohibition of Insider Trading) Regulations, 1992 (“Insider Trading Regulations“) was made here. I have a different perspective on the issue. Every listed company is required under Regulation 12 of the Insider Trading Regulations to formulate a code of internal procedures. Such a code is required to be modeled on the...
Self Regulation for Directors on SEBI’s Board
I recently blogged about the transparency measures that SEBI has initiated by deciding to make its agenda papers and minutes of proceedings public. Under the first such disclosure, it is now learnt that on December 4, 2008, the Board of Directors of SEBI adopted a Code on Conflict of Interests for its members. You can get it on the hyperlink above. In a nutshell, the Code requires every director...
Thoughts on the ASBA process – Part II
(The following post is contributed jointly by Prerak Ved of Crawford Bayley & Co. and Yogesh Chande of Platinum Partners.) In continuation of the thoughts/concerns raised in Part I posted earlier, stated below are some further thoughts/concerns on the ASBA process, including those arising out of SEBI’s press release dated December 04, 2008 bearing PR No.283/2008 (the “Press Release”): (1) As...
Decision in the Vodafone Tax Case
An earlier post mentioned that the decision of the Bombay High Court in the Vodafone case had gone against the petitioners, i.e. Vodafone. However, the text of the judgment which was not available as on the date of that post has become available since, and throws up some interesting issues for discussion. The issues before the Court were (a) the constitutionality of the certain amendments...
Transparency Measures in SEBI
The Securities and Exchange Board of India (“SEBI”) is taking significant and material steps towards bringing in transparency in its own workings. First, the status of offer documents being processed by SEBI is now online. After repeated complaints about delays in clearing offer documents, SEBI now publishes every week, the status of the offer document under process. Therefore, the...
No penal consequences for violating the new trading restrictions on Insiders?!
Poor drafting of the recent amendments to the SEBI Insider Trading Regulations has made the bar on six month reverse trading/ derivatives substantively ineffective. The SEBI Insider Trading Regulations were amended vide notification dated 19th November 2008 available here and some issues relating to these amendments were discussed by me here. The Model Code relating to procedures, etc. to prevent...
Key Decisions at SEBI Board Meeting
SEBI’s recent board meeting has resulted in certain significant decisions impacting capital markets activity in India as well as SEBI’s own decision-making process. Public/Rights Offerings: Observation Letter When a draft offer document is filed with SEBI, either in a public offering (initial public offering (IPO) or follow-on public offering (FPO)) or in a rights offering, SEBI reviews the draft...
Bombay High Court Rules Against Vodafone in Tax Case
The much-awaited judgment of the Bombay High Court in the tax case involving Vodafone has now been delivered. Newspaper reports indicate that the court has decided against Vodafone, although the judgment itself is yet to be available. The Financial Times reports: The Mumbai High Court on Wednesday dismissed a challenge by Vodafone against a $2bn tax case in a blow to the UK group and a potential...
INSIDER TRADING REGULATIONS – HIGHLIGHTS TO THE AMENDMENTS AND SOME POSERS
1) SEBI has amended the SEBI Prohibition of Insider Trading Regulations 1992 vide a notification dated 19th November 2008 which I briefly highlighted here. There are some far reaching amendments. 2) An important amendment is to the definition of “insider”. As I mentioned earlier, no word has been added or deleted but by dropping a comma and breaking the definition into two parts, a significant...
Recent Comments