ArchiveJune 2015

MCA’s Exemption Notification for Government Companies

[The following guest post is contributed by Vinita Nair of Vinod Kothari & Co. The author may be contacted at vinita@vinodkothari.com.] By way of a notification dated June 5, 2015 exempted Government companies, private companies, section 8 companies and nidhi companies from complying with certain provisions of the Companies Act...

Analysis of the New SEBI Promoter Re-classification Norms

[The following guest post is contributed by Shashank Prabhakar, a Senior Associate with Finsec Law Advisors. These are the author’s personal views] Shareholders in a listed company are classified under two broad categories, i.e., those that belong to the promoter / promoter group and those shareholders who are members of the public with no familial or formal business ties with the promoter /...

MCA’s Exemption Notification for Section 8 Companies

[The following guest post is contributed by Nitu Poddar of Vinod Kothari & Co. The author may be contacted at nitu@vinodkothari.com. By way of a notification dated June 5, 2015, the Ministry of Corporate Affairs (“MCA”) exempted Section 8 companies,[1] government companies private companies and nidhi companies from complying with...

The Supreme Court on Penalties and Liquidated Damages

In its recent judgment in Kailash Nath Associates v DDA, the Supreme Court has considered some important questions relating to section 74 of the Indian Contract Act 1872. As its conclusions appear to depart from some well-known principles of contract law, the case warrants close attention. Section 74, of course, provides that the claimant in a breach of contract case is entitled to ‘reasonable...

US Court Rules on the AIG Rescue

During the global financial crisis that was triggered by subprime mortgages, the US Government engaged in rescuing several banks and financial companies. Through nationalization, the Government even acquired ownership and control over several of them.[1] One such was AIG. In that case however, a large shareholder of AIG mounted a legal challenge to the terms of the Government bail out package...

Personal Liberty vs. Public (Financial) Interest

In the prolonging Sahara saga, following a contempt action initiated by SEBI last year the Supreme Court ordered judicial custody for Mr. Subrata Roy Sahara and certain other individuals. This is on account of their failure to comply with a previous judgment of the Supreme Court that orders two Sahara companies to repay monies to investors obtained in violation of various securities laws...

Bombay High Court on Enforcing Articles and Board Nomination Rights

The last few years have witnessed a dispute between two families that relate to the right to nominate directors to the board of Yes Bank. Earlier this week, the Bombay High Court issued its judgment in Madhu Kapur & Ors. v. Rana Kapoor & Ors., which seeks to resolve the dispute – at least temporarily – and in the process clarifies some areas of corporate law and contract law...

Materiality and Disclosure Under Clause 36 of the Listing Agreement

[The following guest post is contributed by Supreme Waskar, who is a corporate lawyer] By an order passed earlier this month, an adjudicating officer of SEBI imposed a fine of Rs. 2 crores on New Delhi Television Ltd. (“NDTV”) for failure to promptly disclose material information to stock exchanges under clause 36 of the listing agreement. Facts of the case On February 21, 2014, NDTV had received...

Negotiable Instruments Amendment Ordinance Promulgated

In May, the Government proposed the Negotiable Instruments (Amendment) Bill, 2015 with a view to amending the Negotiable Instruments Act, 1882 (the “NI Act”). This was necessary due to jurisdictional issues pertaining to cases brought under section 138 of the NI Act for dishonour of cheques. The background and rationale for the amendment has been stated explicitly in the Statement of Objects and...

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