Blog Posts
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New Delisting Regulations – tougher rather than easier
[Posted by Somasekhar Sundaresan] New regulations on delisting have been approved by SEBI. I wrote a column on December 1, 2014 (print edition) of the Business Standard, on how a new element of requiring at least 25% of the public shareholders as of a certain date to have participated in selling their shares, would nudge…
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SEBI’s Proposal for a Dividend Policy
[Posted by Umakanth Varottil] Last week, media reports indicated that SEBI is considering imposing a requirement on listed companies to come out with a dividend policy that will compel (or at least nudge) profitable cash-rich companies to distribute their profits to shareholders. The introduction of more stringent requirements on companies to state their dividend policies…
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Tighter Restrictions on Offshore Derivative Instruments
[Posted by Umakanth Varottil] The issue of offshore derivative instruments (ODIs) such as participatory notes (PNs) have been the subject matter of regulatory controversy for some time now. These are instruments issued by foreign institutional investors (FIIs) (now foreign portfolio investors (FPIs)) to investors overseas that mimic the risks and rewards on underlying securities held…
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Revival of Sick Units Takes Precedence Over Loan Recovery
[Posted by Umakanth Varottil] [The following post is contributed by Prachi Narayan of Vinod Kothari & Company. She can be contacted at prachi@vinodkothari.com] The Supreme Court in its judgment in the case of KSL Industries Ltd vs. Arihant Threads Ltd on October 27, 2014 finally settled the position of law over the vexed issue of…
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SEBI Reforms – Part 2: Delisting
[Posted by Umakanth Varottil] Delisting of securities tends to be somewhat controversial given that it represents the tension between the interests of the controlling shareholder who want to delist the company and the interests of minority shareholders who are caught between the options of exiting the company at the offered value or remaining in the…
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SEBI Reforms – Part 1: Insider Trading
[Posted by Umakanth Varottil] Yesterday, SEBI’s board unleashed a series of capital market reforms. These relate to insider trading, delisting, enforceability of the listing agreement and several other matters. In this post, I briefly examine the implications of the reforms on regulations pertaining to insider trading. The SEBI board has approved a new set of…
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The Bombay High Court on Mutual Mistake, Damages and Restitution
[Posted by V. Niranjan] In Rolta v MIDC, the Bombay High Court has recently considered some important questions relating to the doctrine of mutual mistake, damages for breach of contract and restitution. It is worth examining the judgment closely as it appears to depart from some well-established principles of contract law. The case arose out…
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Delaware Court Ruling on Deal Conditions in the Apollo-Cooper Merger
[Posted by Umakanth Varottil] A recent Delaware court ruling deals with matters involving the “unraveling of the Agreement and Plan of Merger (the “Merger Agreement”) by which a large Indian tire manunfacturer—[Apollo]—was to buy a large American tire company—Cooper Tire & Rubber Company (“Cooper”).” Billed as among the largest overseas acquisitions by an Indian company,…
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Indian Companies Issuing Securities Overseas
[Posted by Umakanth Varottil] Historically, Indian companies have issued equity instruments in the form of depository receipts (either American depository receipts (ADRs) or global depository receipts (GDRs)) or convertible debt instruments in the form of foreign currency convertible bonds (FCCBs). Of late, such overseas securities issuances have reduced quite significantly. Now, the Government has revamped…