ArchiveOctober 2010

More Hurdles for LLPs

As we have previously noted on this Blog, the popularity of limited liability partnerships (LLPs) has not met with expectations since introduction of that business vehicle in April 2009. While the Government has taken certain steps to boost the utility of LLPs, such as by considering the possibility of foreign investment into LLPs discussed in this paper issued by the Department of Industrial...

Software and Royalty: Further Controversies

In an earlier post, I had stated: “The judgment in TCS as also the subsequent decision of the ITAT in Sonata, (2007) 106 T.T.J. (ITAT) 797, make it abundantly clear that payments for shrink-wrapped software would not be chargeable to tax in India. V. Niranjan, in a recent article published in the Journal of Business Law describes the decision...

Changes to Capital Markets Regulations

On October 25, 2010, SEBI announced a number of changes to regulations governing capital markets. 1. Public offerings. A new regime is being established for IPOs by insurance companies. Rather than issue a new set of guidelines for that industry, SEBI has decided to apply the ICDR Regulations, 2009 along with additional industry-specific disclosures such as specific risk factors, overview of the...

Advisory Boards for Indian Companies

About a week ago the Economic Times’ Corporate Dossier carried two columns (here and here) highlighting the growing popularity of advisory boards in Indian companies. The individuals on such boards perform advisory functions and almost no monitoring functions. In that sense, an advisory board is distinct from the statutorily required board of directors of a company. As one column notes: Fiduciary...

Dosco India v Doosan: The Sequel to Citation Infowares

One of the more important recent controversies over the Indian Arbitration Act has been the interpretation of the “express or implied exclusion” to the rule in Bhatia International. As is well known, the Supreme Court held in Bhatia International that Part I of the Indian Arbitration Act applies to international commercial arbitrations held outside India, unless it is “expressly or impliedly”...

The Sale of Liverpool Football Club

Last week, the English High Court of Justice considered a very interesting legal issue, also having great relevance for the football world. This concerned the sale of Liverpool Football Club [“Club”] to NESV, an American company which also owns the baseball team Red Sox. The owners of the Club, Mr. Hicks and Mr. Gillett purchased the club in 2007, funded to the extent of 75% by the Royal Bank of...

The Currency Conundrum

The financial press has been abuzz with discussions and commentaries on the recently initiated “currency war”. While much of the discussion is deeply embedded in macro-economics, the Critical Twenties blog has a useful overview of the tricky issues involved and their possible impact on the Indian economy, written in a manner that is palatable to the non-economist.

Disclosures on Management Changes

The saga involving the removal of SKS Microfinance’s chief executive raises a number of issues relating to corporate governance as well as securities regulation. One such issue pertains to the nature of public disclosures made regarding the removal of the chief executive, which acquires prominence considering SKS is a public listed company. Circumstances that have panned out over the last few...

UK Court of Appeal holds that legal professional privilege reserved for lawyers

In the matter of Prudential PLC and Prudential (Gibraltar) Limited v Special Commissioner of Income Tax and Philip Pandolfo (HM Inspector of Taxes), the UK Court of Appeal has unanimously confirmed that legal professional privilege (LPP) does not apply to any other professional except qualified lawyers – solicitors, barristers and “appropriately qualified” foreign lawyers...

Legality of Sale of NPAs Between Banks

Last week, the Supreme Court issued its ruling on whether non-performing assets/loans (NPAs) can be transferred between banks without the concurrence of the borrowers. The case involved a transfer of NPAs (relating to the borrower, APS Star Industries Ltd.) from ICICI Bank to Kotak Mahindra Bank. The borrower was in liquidation. When the assignee Kotak Mahindra Bank sought before the Company...

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