ArchiveJanuary 2013

U.S. Ruling on Investment Banker Liability in M&A

Last week, a jury in Boston rejected a claim against Goldman Sachs in its role as investment banker to the sale of Dragon Systems Inc. The deal involved a sale of Dragon to Belgian company, Lernout & Hauspie, in consideration for which Lernout & Hauspie issued its own stock to Dragon’s shareholders in an all-stock deal. The trouble was that the acquirer, Lernout & Hauspie, soon became...

Inter Se Promoter Exemption for Takeovers: Computation of Holding Period

A few days ago, SEBI made public its informal guidance issued to Weizmann Forex Ltd. on October 25, 2012. In this case, the target company became listed only in 2011 due to a corporate restructuring process. The question was whether certain shareholders can avail of the exemption for inter se promoter transfer by taking into account the promoter holdings in the previous company from which the...

Developments on the GAAR

The Shome Committee recently released its final report, which can be downloaded from this link. (We had discussed the recommendations of the earlier report on this blog, here.) Following this, the Ministry of Finance has clarified that some of the recommendations of the Committee will be implemented by means of suitable amendments to the provisions as presently enacted. It appears that the...

Legal advice privilege for tax advice given by non-lawyers

One of the striking changes in professional advice over the last two or more decades is the gradual erosion of the monopoly which members of the legal profession once had in giving legal advice. This, with the increasing importance of specialisation, has seen businessmen turn to members of other professions who are experts in particular fields that call for legal advice: for example, a chartered...

SEBI Investment Advisers Regulations – an overkill?

In continuation with earlier post on the recently notified SEBI(Investment Advisers) Regulations, 2013 (“the Regulations”), the following further points are worth noting. 1)     The Regulations apply to all Investment Advisers giving investment advice. They are required to register themselves with SEBI. 2)     The term investment advice has been defined to...

Widely framed Investment Advisers Regulations released

SEBI has released today the SEBI (Investment Advisers) Regulations, 2013, to come into effect from the ninetieth day of their publication. While a more detailed post will follow, here are some first impressions. SEBI has cast a very wide net, almost amounting to an overkill.  Every Investment Adviser, as defined, will be required to register with SEBI to carry on business of providing...

SEBI’s Recent Securities Markets Announcements

Last week, SEBI took certain decisions in the form of minor reforms to the securities markets, both primary and secondary. As part of a process that began nearly 3 years ago, SEBI has further liberalized the process for dilution of promoter shareholding in listed companies, since a deadline of June 2013 has been set to ensure minimum level of public shareholding in listed companies. This time...

Service of Notice on Parties to an Indian Arbitration

In Benarsi Krishna v Karmayogi Shelters, the Supreme Court has decided that the word “party” in section 34 of the Arbitration and Conciliation Act, 1996, does not include a party’s agent. This, it is respectfully submitted, is incorrect or, at best, too widely stated. The important practical consequence of this proposition is that the period of limitation does not begin to run from the date of...

Dismissal of Suit Against Satyam Directors

Last week, there was coverage in the financial press about the dismissal of a securities law suit by a New York court against the independent directors of Satyam. Now, a copy of the order dated January 2, 2013 issued by Judge Barbara Jones of the Southern District of New York is available through D&O Diary, which also carries a detailed analysis of the opinion. The shareholder suits failed on...

SEBI’s Proposal to Overhaul Corporate Governance Norms

SEBI has issued a consultative paper that reviews corporate governance norms in India with a view to overhauling them considering developments in the Indian corporate sector over the last few years. The paper is quite detailed and is expected to generate a great amount of discussion, which would be considered by is SEBI before implementing any revised norms. Suggestions are due on the...

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