[This is a continuation of a previous post on the topic. It has been contributed by Ms. Sikha Bansal of Vinod Kothari & Company, who can be reached at [email protected]] 4. Legality of option contracts Option contracts conferring exit opportunities to investors are, in commercial practice, important in view of the growth of funding...
Analysis of SEBI Notification on Pre-emption Rights and Options – Part 1
[Last week, we had discussed SEBI’s recent notification granting conditional validity to pre-emption rights and options in securities of Indian companies. In the following two-part post, Ms. Sikha Bansal of Vinod Kothari & Company provides a detailed background to SEBI’s recent reforms and analyses their impact. She can be reached at [email protected]] In our elaborative article...
Unlisted Companies: Raising Capital Abroad
In the late 1990s, it was possible for Indian unlisted companies to raise capital overseas and list on overseas stock exchanges without having a primary listing in India. Companies such as Rediff and Sify had taken advantage of this mechanism and listed on the US stock exchanges. However, a few years ago, this route was effectively blocked when the Government of India stipulated that a primary...
SEBI introduces ‘Angel Funds’
[The following post is contributed by CS Vinita Nair – [email protected] & Pooja Rawal – [email protected] from Vinod Kothari & Company, Practising Company Secretaries] “Angel investors bring both experience and capital to new ventures. SEBI will prescribe requirements for angel investor pools by which they can be recognised as Category I AIF venture capital funds”...
The Enforceability of Guarantees in Contravention of Indian Foreign Exchange Law
The choice of a law to govern a contract and a court to resolve disputes arising out of it is—naturally—fundamental in many ways. One of these is that a defence otherwise available may be lost, if one law does not contain it and the conflicts rules of the forum lead to the application of that law in preference to the law that does. Another is that different jurisdictions take different views...
Arbitration Agreements in Writing: a recent Bombay High Court decision
In a judgment delivered on September 19, 2013, in the case of Mody v. Kerwala, a learned Single Judge of the Bombay High Court has considered the requirement that an arbitration agreement must be in writing. The learned single Judge has held that s. 7 not only imposes a requirement that the arbitration agreement must be in writing; but also provides for the exclusive modes of proving...
SEBI Notification on Pre-Emption Rights, Put and Call Options
The enforceability of pre-emption rights and put and call options in securities of Indian companies has been fraught with difficulties for a number of years. These have been discussed in detail in this paper, with arguments made for streamlining these provisions to recognise such rights and options in investment agreements. Although the Securities and Exchange Board of India (SEBI) had been...
Takeover Regulations: Intention to Acquire
[The following post is contributed by Yogesh Chande, who is a Consultant with Economic Laws Practice, Advocates & Solicitors. Views of the author are personal] In an order passed by the SEBI, Adjudicating Officer in the context of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations (SEBI Takeover Regulations), the Adjudicating Officer relying upon a decision of the...
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