Month: December 2009
-
The Year That Was: A Round-up of 2009
[Posted by Umakanth Varottil] The year began amid serious efforts by governments across the world to battle the fallout of the financial crisis. Although India escaped relatively unscathed from the direct effects of the crisis, it had experienced flight of capital from the country. While 2009 saw investors flocking back and aiding the recovery of…
-
Compensating Investors: IPO Irregularities
[Posted by Umakanth Varottil] SEBI has recently published a report by the Justice D.P. Wadhwa Committee in connection with irregularities in various IPOs in 2005. The report itself was, however, submitted by the Committee to SEBI as early as December 2007. In those IPOs, certain applications were made by certain persons using fictitious demat and…
-
DIPP issues draft “Master Press Note”
[Posted by Jayant Thakur] The Department of Industrial Policy and Promotion has issued a draft Press Note dated 24th December 2010 (“PN”) that is similar to the Master Circulars that we have on FEMA issued by the Reserve Bank of India. This 66 page Press Note is only a draft and comments are invited by…
-
The RTI and Income Tax Returns
[Posted by Shantanu Naravane] The recent decision of the Central Information Commission in the Escorts case, has led to many raised eyebrows. In sum, the CIC held in Mr. Rakesh Gupta v. Public Information Officers (Decision No. CIC/LS/A/2009/000647/SG/5887, available here), that the information submitted to the Income Tax Department by a company cannot be personal…
-
Bad Debts, Commercial Judgment and Taxation
[Posted by V. Niranjan] We have discussed the controversy in Indian law surrounding the treatment of bad debts. In short, it has traditionally revolved around two questions. The first pertained to the extent to which commercial reality could influence the determination of taxable income. In particular, banks began to account interest on non-performing assets [“NPA”]…
-
Bombay High Court on the Entry of Foreign Law Firms
[Posted by Mihir Naniwadekar] The Bombay High Court (Swatanter Kumar C.J. and J.P. Devdhar J.) has held that foreign law firms are not eligible to practice law in India even in a non-litigation context. Foreign law firms are also not entitled to open liaison offices in India. The case is Lawyers Collective v. Bar Council…
-
Foreign Collaboration and Royalty Payments
[Posted by Umakanth Varottil] Hitherto, Indian companies were allowed to make royalty payments to their foreign collaborators under the automatic route within certain limits. These involved payment for technology transfers of a lump sum fee of US$ 2 million and royalty of 5% on domestic sales and 2% for exports. Where no technology transfer was…
-
More Suggestions for Governance Reforms
[Posted by Umakanth Varottil] When the financial fraud at Satyam occurred nearly a year ago, there was tremendous anticipation of swiftly regulatory activity to follow in terms of reforms to corporate governance norms. But, that was not to be. Any hopes were only dampened when it was announced that the Companies Bill (drafted in the…
-
Changes to ECB Policy
[Posted by Umakanth Varottil] The Reserve Bank of India (RBI) last week announced changes to the policy governing external commercial borrowings (ECBs). This represents a reversal on two counts: 1. The all-in-cost ceilings, which were withdrawn about a year ago, have been reintroduced “in view of the improvement in the credit market conditions and narrowing…