[The following guest post is contributed by Bhushan Shah & Neha Lakshman from Mansukhlal Hiralal & Company. The views expressed in the post are personal] A convertible note is an instrument issued as debt and convertible into equity of a startup at the option of the holder, upon a future contingency taking place, usually when the startup obtains an additional round of investments...
Listing of Stock Exchanges and Addressing Conflicts of Interests
A few years ago, we had discussed possible issues that arise out of the commercial operations of a stock exchange. While an exchange is a profit-making institution and is required to act in the interests of its shareholders, it also carries out a regulatory role in selecting companies that are to be listed on it and thereafter in overseeing their compliance with the listing requirements. These...
Supreme Court on Board Appointments During a Takeover Offer
Background In Securities and Exchange Board of India v. Burren Energy India Limited (decided on 2 December 2016), the Supreme Court of India was concerned with a couple of issues relating to the technical interpretation of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (the “1997 Regulations”). This case involved an indirect acquisition of shares by an English...
SEBI Order in the United Spirits Case
Over the last year or so, there has been considerable discussion in the press about the allegations of diversion of funds by the erstwhile management of United Spirits Limited (USL) to other companies within the United Breweries (UB) group, including Kingfisher Airlines Limited (KFA). This was also a result of investigations conducted by USL through certain audit firms. Subsequently, this became...
SEBI Order under the Investment Advisers Regulations
A whole-time member of the Securities and Exchange Board of India passed an order involving CapitalVia Global Research Limited under the SEBI (Investment Advisers) Regulations 2013 (the “IA Regulations”). The case arose out of an inspection carried out by SEBI on CapitalVia, which resulted in an interim order being passed by SEBI on November 11, 2016. Since then, SEBI has held hearings and...
Resolving the Conflict between the Corporate Insolvency Resolution Process and Relief Undertaking Legislation
[The following guest post has been contributed by contributed by Sikha Bansal of Vinod Kothari & Company, who can be reached at [email protected]] The Insolvency and Bankruptcy Code, 2016 (the “Code”) is under speedy implementation: while its provisions relating to corporate resolution and liquidation (except voluntary liquidation) have been notified, provisions relating to individual...
Exemptions to companies operating from the IFSC
[The following guest post is contributed by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai.] Continuing with the Government’s efforts to promote the International Financial Services Centre (“IFSC“), the Ministry of Corporate Affairs (“MCA“) has issued notifications dated January 4, 2017, which provide an exemption from (or modify) certain...
‘Second Instance’ Arbitration: Centrotrade Minerals
In an important decision, the Supreme Court has recently held that the Indian Arbitration and Conciliation Act 1996 (‘the 1996 Act’) does not prohibit the parties from entering into an arbitration agreement that provides for an appeal from the first award to a second arbitral tribunal constituted under that agreement. The decision, however, also gives rise to further questions—not all of which...
Delaware Supreme Court on Board Independence
Issues of board independence, and particularly the position and role of independent directors, have resurfaced to the fore in India in recent months. Given this scenario, it may be useful to consider developments relating to board independence occurring elsewhere. Here, a ruling last month from the Delaware Supreme Court on the determination of board independence would be of interest. In Thomas...
SEBI Elaborates on Board Evaluation
Along with the considerable enhancement in the duties and responsibilities of boards of directors of Indian companies that was occasioned due to the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, there has been a considerable emphasis on board evaluation as a measure of not only enhancing corporate governance in general, but also as a means...
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