ArchiveDecember 2015

Differentiated Banks – Leading the March Towards Financial Inclusion

[The following guest post is contributed by Neelasha Nemani, who is a 4th year B.A. LL.B. (Hons.) student from National Law University Odisha, Cuttack.] India’s impetus on financial inclusion is now stronger than ever. Recently, the Reserve Bank of India (RBI) granted an in principle approval to 11 entities to set up Payments Banks[1] and 10 entities to set up Small Finance Banks[2] as an...

Premium on Buyback: a Deductible Expenditure?

In an earlier post on this blog, Mr. Jayant Thakur had considered certain decisions of the Income Tax Appellate Tribunal (notably, Chemosyn v. ACIT) where the ITAT had held that “… premium paid by the company on buyback of shares of a warring shareholder group is deductible as business expenditure in the hands of the company…” It was pointed out in that post that the Tribunal had...

Presumption in Insider Trading

Given the evidentiary problems in insider trading cases, SEBI has resorted to the use of presumptions in its enforcement of the SEBI (Prohibition of Insider Trading) Regulations, 1992. Some of the issues that arose due to this approach have been discussed in the past. These issues have resurfaced more recently in a short order of the Securities Appellate Tribunal (SAT) in the case of Reliance...

Competition Law: Analysis of the COMPAT Order in Surendra Prasad v. CCI

[The following guest post is contributed by Sarthak Raizada and Kartikey Kulshreshtha, who are 4th year students at Dr. Ram Manohar Lohiya National Law University, Lucknow.] Introduction The Competition Act, 2002 (the “Act”), while still in the early stages of its development in India, has witnessed immense litigation. The Competition Commission of India (“CCI”) has adjudicated and delivered...

Contract Depriving a Party of Interest: Immorality and Public Policy

[The following guest post is contributed by Amitav Singh, a fourth-year student at the National University of Advanced Legal Studies (NUALS), Kochi] In a recent decision in Union of India v. M/s NK Garg & Co. (“NK Garg”), decided on 2 November, 2015, a single judge of the Delhi High Court (“Court”) held that any agreement by which a party is deprived of interest would be void on the ground...

Whether Collection of Margin on Derivative Trades is Mandatory?

[This post is contributed by Prachi Pandya, founding proprietress of Corporate Attorneys and Vanessa Fernandes, an intern at Corporate Attorneys] Despite being termed as a weapon of mass destruction by Warren Buffet, derivatives are still an integral part of stock market trading. Whilst purchasing equity, one has to pay the entire value of the shares purchased within the settlement period of two...

Problems with the RBI’s new ECB framework

[This guest post is by Pratik Datta and Shefali Malhotra, who are Consultants at the National Institute of Public Finance and Policy (NIPFP). They can be reached at prat.nujs@gmail.com and shefali.malhotra@nipfp.org.in respectively.] Introduction This blog had earlier explained the policy backdrop leading up...

The Proper Purpose Rule

Eclairs Group v. JKX Oil [2015] UKSC 71 is an important illustration of the power of the Courts to interfere in decisions taken by the Board of a company (even when those decisions are taken in good faith by the Directors). JKX Oil [“JKX”] is a company listed on the London Stock Exchange. Eclairs and Glengary, both incorporated in the British Virgin Islands, owned substantial minority...

Papers on Takeover Regulation

I have posted two papers on SSRN, the titles and abstracts of which are as follows: 1.         “Comparative Takeover Regulation and the Concept of ‘Control’” The mandatory bid rule (MBR), one of the basic tenets of takeover regulation, obligates an acquirer who obtains ‘control’ over a target company to make an offer to acquire the shares of the...

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