ArchiveFebruary 2011

Supreme Court on Tainted Securities

In Varghese Joseph v The Custodian, the Supreme Court was called on to clarify the approach to be adopted in relation to tainted securities under the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992. Although there is not much by way of company law principles of even statutory interpretation to be gleaned from the decision, it is of importance due to the investor...

MCA grants exemption from attaching subsidiary accounts

Section 212 of the Companies Act, 1956 requires holding companies to attach with its balance sheet, a copy of the balance sheet, profit and loss account etc., of each of its subsidiaries. In recent years, with the globalization of the Indian economy, there has been a large increase in the number of holding companies and subsidiaries. Accounting policies and practices have also evolved, and...

Supreme Court on Section 394: Sesa v. Krishna Bajaj

The Supreme Court of India recently revisited the law on schemes of amalgamation under Sections 391-394 of the Companies Act, 1956 in Sesa Industries v. Krishna Bajaj. The Supreme Court was concerned with a set of appeals by special leave from the judgment of a Division Bench of the Bombay High Court at Panaji. The Division Bench had set aside a judgment of a Single (Company) Judge sanctioning a...

Managerial Remuneration in Unlisted Companies: Process Eased

When the rest of the world is tightening the screws on payment of managerial remuneration in the wake of the financial crisis, the Ministry of Corporate Affairs (MCA) in India has eased the process for such payments in the case of unlisted companies. However, this is certainly understandable. The erstwhile process of requiring even unlisted public companies to approach the MCA for payment of...

The Concept of an “Interested” Shareholder

Yesterday’s board meeting at SEBI was not expected to generate any substantial decision owing to the impending change of guard at the regulatory institution. True to expectations, key matters such as amendment to the Takeover Regulations and implementation of the Jalan committee report on stock exchanges and other market infrastructure institutions were deferred. However, SEBI expressed its...

Literature on Takeover Regulations

I recently came across two papers dealing with the SEBI Takeover Regulations and other related legislation in India, and a discussion of issues that arise in takeovers of Indian companies. 1. The Emerging Market for Corporate Control in India: Assessing (and Devising) Shark Repellants for India’s Regulatory Environment by Abhinav Chandrachud. Abstract: Inbound and domestic hostile takeover...

Islamic Finance and the Indian Constitution

The concepts of Islamic banking and Islamic finance are yet to gain significant ground in India and attain the popularity they have witnessed in other countries. While there has been a debate about the need for a separate legal framework in India to promote the form of finance recognized under principles of Sharia law, the judiciary recently had the opportunity to test the validity of Islamic...

The 1st Annual SLR – Sage Essay Competition

Socio-Legal Review (SLR), the inter-disciplinary, peer-reviewed and student edited journal published by the National Law School of India University (NLSIU) and Sage Publications, the independent international publisher of books, journal and international media have announced the 1st Annual SLR – Sage Essay Competition.  TOPICS Participants have to write the essay on any one of the following:...

Lobbying: An Indispensable Part of Pluralistic Democracy or the Evil That Needs to Be Shunned?

[The role of lobbying in the legislative and regulatory process in India has been the subject matter of great debate lately. In particular, the role of lobbyists in proving an interface between the corporate sector and various arms of Government is at the forefront. Lobbying has thus far been carried on in an informal manner, and the issue has received scant attention from a legal perspective. In...

Regulating Foreign Venture Capital Investors

In a post on the Critical Twenties blog, Sarika raises a number of issues (both legal as well as practical) that plague the regulatory system governing foreign venture capital investors (FVCI). Although success in innovation is usually propelled by a facilitative legal, regulatory and contractual system that allows unimpeded flow of capital to finance such innovation, the issues highlighted in...

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