ArchiveJuly 2013

‘Marketable Securities’ and ‘Spot Delivery Contracts’: The Supreme Court’s Analysis of the SCRA

In its recent judgment in Bhagwati Developers v Peerless General Finance, the Supreme Court has considered some important questions relating to the interpretation of the Securities Contract (Regulation) Act, 1956 [“SCRA”]. There were principally two questions before the Court: (i) the applicability of the SCRA to public unlisted companies and (ii) the construction of a settlement agreement to...

Constitutional Validity of Regulatory Regime for CIS Upheld

Earlier this week, a single judge of the Calcutta High Court in Rose Valley Real Estate & Construction Ltd v. Union of India upheld the constitutional validity of certain sections of the SEBI Act (including section 11AA) and certain provisions of the SEBI (Collective Investment Scheme) Regulations, 1999 (the CIS Regulations). Specifically, a challenge was mounted to amendments to the SEBI Act...

Fresenius Kabi: SEBI Order on Delisting

[The following post is contributed by Yogesh Chande, who is a Consultant with Economic Laws Practice, Advocates & Solicitors. Views of the author are personal] It may be recalled that, pursuant to an announcement issued by Fresenius Kabi Oncology Limited (target company) on 30 May 2012, the stock exchanges were informed that its promoter shareholders have notified the target company of their...

Supreme Court on Jurisdiction Clauses

A recent decision of the Supreme Court, Swastik Gases v. Indian Oil Corp. (Civil Appeal 5086 of 2013, decision dated July, 3, 2013), examines the position of Indian law dealing with exclusive jurisdiction clauses. The Court was concerned with a case where an agreement was executed in Kolkata, while all the other elements of the cause of action had taken place in Jaipur.  The agreement...

Securities Laws Amendment Ordinance: An Overview

As some of us have observed time and again on this Blog, the substantive aspects of securities regulation have become progressively extensive and sophisticated in India. Over the last two decades of SEBI’s functioning, it has constantly updated securities laws to meet with market developments, whether it is in the primary markets (IPOs, QIPs, etc.) or in the secondary markets (insider trading...

Directors’ Right to Information

Earlier this month, the Delaware Chancery Court ruled on the extent to which a director of a company can seek to obtain information from the company in order to discharge applicable duties. In Kalisman v. Friedman, the court was concerned whether Jason Kalisman, a director of Morgans Hotel Group Co., was entitled to certain information regarding the company. Kalisman was a representative of OTK...

Takeover Exemption: Inter Se Transfer Among Promoters

A few months ago, we had discussed certain orders passed by SEBI that exempted parties from mandatory open offers in certain specific circumstances. Recently, SEBI passed an exemption order in a transfer involving the shares of GMR Infrastructure Limited (the target company). In this case, 70.3% of the shares of the target company are held by GMR Holdings Private Limited (GHPL). GHPL is in turn...

Another Round of FDI Reforms

The Government seems to be facing a somewhat similar situation that it faced way back in 1991 when it launched big bang reforms for liberalization of the Indian economy. With slowing growth rates and a sliding Rupee, the Government seems compelled to take immediate measures. One such set of measures relates to reforms that help attract greater flow of foreign direct investment (FDI) into the...

A Clarification of BALCO v. Kaiser

In an important judgment, the Bombay High Court has clarified that the judgment of the Supreme Court in BALCO is not entirely prospective: not the entire reasoning of the Supreme Court applies prospectively.  In particular, there have been some recent occasions when questions have arisen as to what the proper court for filing of s.9 application is; and what is the effect of the observations...

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