ArchiveFebruary 2013

Budget 2013: Taxation as a Solution to a Governance Problem

A couple of months ago, we had discussed the corporate governance issues that emerge when Indian subsidiaries of multinational companies pay substantial amounts to their parents in royalty. While we will have a chance to discuss the taxation issues in the Budget in greater detail, the proposal to increase taxation on such royalty payments stands out. The Finance Minister’s speech notes: 147...

Budget 2013: Foreign Portfolio Investment

The Finance Minister has sought to streamline the currently complex regime for foreign portfolio investment. The Budget speech notes: – There are many categories of foreign portfolio investors such as FIIs, sub-accounts, QFIs etc. and there are also different avenues and procedures for them. Designated depository participants, authorised by SEBI, will now be free to register different...

The Exportation of Indian Capital Markets

Reuters has a report indicating that the volume of trading in Indian derivatives in the Singapore market is almost as robust as that in the Indian market. This suggests that the Indian capital markets are being exported overseas. Investors are able to enjoy the investment benefits in Indian underlying assets or investments without actually investing in India. Usually, this phenomenon occurs for...

Takeover Regulations: Computing Creeping Acquisition Limits

SEBI has published its informal guidance on a matter that delves into the mechanics of computing the creeping acquisition limit of 5% per year in a company whose share capital may have undergone changes during the same period. Aksh Optifibre Limited made an application on August 17, 2012 to SEBI to seek its informal guidance on the specifics of its case. The company’s promoters had made a series...

RBI Guidelines for Licensing of New Private Sector Banks

The Reserve Bank of India (RBI) has issued a final set of guidelines for licensing of new banks in the private sector. These guidelines will becomes operational with effect from July 1, 2013 and applications under them for establishing new banks must be submitted to the RBI before that date. These guidelines are based on the draft issued by the RBI in August 2011. Since then, the RBI has received...

Foreign Investment in Corporate Debt

[Vinita Sithapathy, who is a lawyer and a company secretary, has contributed the following post. Vinita graduated from Government Law College, Mumbai in 2008. She has advised clients on banking and finance and corporate M&A transactions since 2008. She can be contacted at vinita.sithapathy@gmail.com]...

SEBI Adjudication Order: “Persons Acting in Concert”

Nearly three years ago, we had discussed SEBI’s initial order relating to trading of shares in Bank of Rajasthan (BoR). Last week, the adjudicating officer of SEBI has passed an order imposing a hefty penalty on 118 entities that traded in shares of for violation of the provisions of the SEBI Takeover Regulations and the SEBI Regulations on Fraudulent and Unfair Trade Practices. The facts of the...

NUJS announces scholarships for online business law course

[The following announcement is posted on behalf of NUJS, Kolkata] In light of the encouraging response from young lawyers and law students when the first batch of the diploma course on Entrepreneurship Administration and Business Laws was started last July, NUJS has announced five scholarships for economically backward law students for the second batch of the course. The course...

When a Rights Offering Becomes a Public Offering

In August last year, the Supreme Court unequivocally ruled in the Sahara case on the issue of when an offer of shares by an unlisted company would become a public offering thereby invoking SEBI’s jurisdiction. One of our readers, Sumit Agrawal, has brought to our attention a decision of the Kerala High Court in Securities and Exchange Board of India v. Kunnamkulam Paper Mills Ltd, where it was...

Scheme of Arrangement – Revised requirements for the stock exchanges and listed companies

[Yesterday, we had the opportunity to provide a brief analysis here on SEBI’s new circular on the topic. In the following post, Yogesh Chande points to some ambiguities regarding the scope of SEBI’s new circular. Yogesh is a Consultant, Economic Laws Practice, Advocates & Solicitors. Views expressed by the author are personal] This post pertains to the circular issued by Securities and...

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