ArchiveDecember 2016

A Careless Concern for Workmen’s Dues: Insolvency Code of 2016

(The following guest post is contributed by Mridul Godha, a third-year student at the National Law University, Jodhpur) The Joint Committee on the Insolvency and Bankruptcy Code of the Lok Sabha was much concerned about the welfare of workmen. “Workers are the nerve centre of the company. In the event of any company becoming insolvent or bankrupt, the workmen to get affected adversely and...

Appointment and Removal of Independent Directors: Need for Reform?

The removal this week by three Tata group companies of Mr. Nusli Wadia as an independent director from each of them has reinvigorated some of the debate surrounding board independence from a conceptual standpoint. This has provided critics of board independence with more fodder. In the past, there was anecdotal evidence that whenever there were disagreements between managements or promoters on...

ESOP Shares and the Computation of Open Offer Triggers

Under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Regulations”), an acquirer must make a mandatory open offer to acquire the shares of the remaining shareholders when the acquirer acquires shares (with voting rights) beyond prescribed thresholds. Since the triggers are based on the acquisition of shares with voting rights, questions could arise whether...

Bombay High Court Clarifies Rights of Nominees in Shares

An intricate legal question that has befuddled various courts relates to the conflicts between the rights of nominees and those of successors in the case of ownership of various financial instruments, including shares of a company. As regards shares, the issue came to the fore in 2010 in the case of Harsha Nitin Kokate v. The Saraswat Co-operative Bank Limited (“Kokate”) wherein, after...

Towards a Conducive Framework for REITs – Recent SEBI Amendments

[The following guest post is contributed by Sumit Agrawal, Partner, Suvan Law Advisors and Arka Saha, a final year law Student from National Law University, Orissa. Views are personal] Although the capital and commodities market regulator, the Securities and Exchange Board of India (SEBI), had introduced Real Estate Investment Trusts (REITs) Regulations on September 26, 2014, REITs are yet to...

Companies Act, 2013: Schemes and Winding-Up Provisions Operational

Although the Companies Act, 2013 was enacted more than three years ago, its provisions have been brought into effect in a phased manner. One of the important chunks of the new legislation relating to schemes of arrangement and winding up were yet to be brought into force. However, this position has since changed because the Ministry of Corporate Affairs (MCA) issued a notification on December 7...

Disputes Arising out of Trusts Non Arbitrable in India

[The following guest post is contributed by Bhushan Shah & Anchal Singh from Mansukhlal Hiralal & Company. The views expressed in the post are personal.] The Indian Trusts Act, 1882 Act (“Trusts Act“), which is a comprehensive code, broadly deals with the manner of creation of trusts, the rights, powers and duties of trustees, breach of trust and remedies. In Vimal Shah v...

Is the Doctrine of Ultra Vires Applicable to LLPs?

[The following guest post is contributed by Saumya Kakkar, Associate and Govinda Toshniwal, Senior Associate, both with NovoJuris Legal.  They can be contacted at relationships@novojuris.com] The objects clause of the Memorandum of Association (“MOA”) of a company enlists and defines the main...

US Supreme Court Clarifies Tippee Liability in Insider Trading

The law on insider trading has received considerable attention in the United States (US) in recent years. At the same time, the law in the US is quite narrow compared to most other jurisdictions because liability for insider trading arises only if the person trading owes a fiduciary duty to the company and its shareholders, which has subsequently been extended to a duty owed to the source of the...

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