ArchiveDecember 2010

Shareholders Agreements: Clauses and Enforceability

Shareholders agreements are contracts among shareholders of a company (to which the company is also usually a party) that confer rights and impose obligations over and above those provided by company law. The agreements provide for matters such as restrictions on transfer of shares (right of first refusal, right of first offer), forced transfers of shares (tag-along rights, drag-along rights)...

Corporates and Lobbying

Issues surrounding lobbying by corporates have cornered media attention over the last few weeks. Broadly speaking there does not seem to be any legal provision that directly regulates lobbying, although the Government has announced that it is considering the enactment of a specific legislation that governs lobbying. For an analysis of the legal aspects governing corporate lobbying in India and...

CSR: Not Mandatory After All

A couple of months ago, the Ministry of Corporate Affairs (MCA) announced its intention to include a mandatory provision for corporate social responsibility (CSR) in the Companies Bill. The issue of regulating CSR using the stick of a mandatory provision was the subject-matter of critique, including on this Blog. The Government appears to have taken an about turn now doing away with the mandatory...

Regulatory Steps Towards Public Offerings and Transparency

The Economic Times reports that SEBI has issued a circular which requires companies with less than 25% public float to raise funds through public offering of securities rather than through private placement to institutions, or QIPs. This is with a view to increasing the public holding in listed companies and to contain stock price manipulation. SEBI’s move comes close at the heels of its order on...

Amendments to Equity Listing Agreement

Earlier this month, SEBI issued amendments to the Equity Listing Agreement. The amendments have been discussed in the SEBI Updates Blog. There are a number of procedural changes, including requirements regarding reporting of shareholding patterns of listed companies and announcements regarding significant corporate events. More importantly, clause 40A of the listing agreement has been amended to...

Theoretical Foundations of Corporate Law: Ronald Coase

For those interested in theoretical aspects of the firm and their influence in corporate law, the Schumpeter column in the Economist discusses the academic life of Ronald Coase, who turns 100 this month. Here are some excerpts: The man who restored the pin factory to its rightful place at the heart of economic theory celebrates his 100th birthday on December 29th. The economics profession was...

Consilience 2011: Conference on Privacy, Technology and the Law

The Law and Technology Committee (elTek) of the National Law School of India University, Bangalore is hosting ‘Consilience’, a conference where contemporary issues of critical relevance in the field of law and technology are addressed. Past editions of the conference have engaged with a vast spectrum of cutting edge issues such as “Legal Aspects of Business Process Outsourcing”, “Biotechnology...

Allahabad High Court Stay in the SEBI-Sahara Case

(This post has been contributed by Amit Agrawal, a legal practitioner practicing before Rajasthan High Court, Jaipur and an alumnus of National Law School of India University, Bangalore)In the SEBI-Sahara controversy, SEBI has previously issued an ad-interim order on November 24, 2010 (discussed previously on this Blog) against Sahara entities and their promoters and directors. The securities...

Progress Property Affirmed: Unlawful Distribution of Capital

“The rule is essentially a judge-made rule, almost as old as company law itself, derived from the fundamental principles embodied in the statutes by which Parliament has permitted companies to be incorporated with limited liability.” So said Lord Walker last week in delivering the judgment of the United Kingdom Supreme Court in Progress Property v Moorgarth. Lord Walker was, of course, referring...

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