Mihir and I had previously discussed (here and here) the Supreme Court’s judgment in the Iridium Motorola case rendered in October 2010. We have now posted a more detailed analysis in a case note titled “Corporate Criminal Liability and Securities Offerings: Rationalizing the Iridium-Motorola Case” that is scheduled to be published in the National Law School of India Review. The abstract is as...
Allahabad High Court’s Order Vacating Stay in the Sahara Case
We have previously discussed SEBI’s order restraining two entities of the Sahara group as well as certain promoters and directors from accessing the capital markets. The order was subsequently stayed by the Allahabad High Court. On April 7, 2011, the Allahabad High Court vacated its stay, and this order is now accessible through eLegalix (Writ Petition No.11702 (MB) of 2010). While vacating the...
MCA Circular on Prosecution of Directors
One of the disincentives that operate against directors, particularly non-executive directors, is that they are often susceptible to prosecution for offences committed by the company that it not within their knowledge. Occasionally, innocent directors have been subject to victimization by requiring to answer allegations that are often frivolous in nature. This concern has now been addressed, at...
Scheme of Arrangement: Role of Tax Authorities
The role of the tax authorities in challenging a scheme of arrangement under sections 391 to 394 of the Companies Act, 1956 has been called in question in the demerger of the passive infrastructure assets of various Vodafone Essar entities into Vodafone Essar Infrastructure Limited. This was an intra-group transaction as all companies enjoyed a wholly owned subsidiary relationship with one of the...
India’s Contribution to the Global IPO Activity
Since economic liberalization in 1991 and following SEBI’s efforts in spearheading the primary capital markets, IPO activity of Indian companies has witnessed significant growth. A recent study that compares global IPO activity with the US domestic markets provides key comparative data that help assess India’s performance. In a paper titled “The U.S. left behind: The rise of IPO activity around...
Regulating Offshore Derivative Instruments
Over the last few years, SEBI has been adopting various strategies to regulate the use of offshore derivative instruments (ODIs) such as participatory notes that enable foreign investors to participate in the Indian markets without actually owning the underlying securities. The strategies include restricting the use of ODIs, and also requiring the application of know-your-client norms (KYC) by...
4th Annual NLSIR Symposium: India’s Taxation Regime: Perspectives on the Proposed Changes
(The following announcement comes from the National Law School of India Review) The Annual NLSIR Symposium has earned the reputation of being a unique forum for the consideration of contemporary legal developments having attracted leading practitioners such as Mr. Nishith Desai, Ms. Bijal Ajinkya, Mr. Sandeep Bhagat, Mr. Stephen York, Mr. Padam Khincha, Mr. Gourab Banerji, Mr. Arvind Datar, TP...
Changes to FDI Policy – Part V: Sectoral Rules
In this final post in the series, we look at the one change introduced by the Consolidated FDI Policy, Circular No. 1 of 2011 to the sectoral requirements in the agricultural sector, and also briefly touch upon some areas that have been overlooked in the current round of policy review (but yet are under active consideration). Earlier, FDI under the automatic route up to 100% was available for...
Regulating use of Internet can stifle
SEBI’s move to regulate the usage of e-mail, internet and electronic means of communication by employees of market intermediaries, and to make the compliance officer liable, was commented upon recently by Umakanth here. However, well-intentioned, SEBI’s move is not implementable, poses serious issues for the office of the compliance officer, and can have the unintended consequence of stifling...
Changes to FDI Policy – Part IV: Downstream Investments
Indirect foreign investment into Indian companies had been a subject matter of ambiguity in the FDI policy. For instance, if an Indian company (that has foreign investors) makes investments into another Indian company, would that downstream investment be treated as domestic investment or foreign investment? While rules govern such investment? In order to streamline the policy, the Government had...
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