Blog Posts
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SEBI’s Final Order in GDR Manipulation Case
[Posted by Umakanth Varottil] In a September 2011 post, we had discussed an ad-interim ex parte passed by SEBI in relation to a specific transaction structure that involved the use of global depository receipts (GDRs) to allegedly manipulate the stock price of several companies: The modus operandi was as follows. The companies issued GDRs, which…
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Share buybacks – cause for concern?
[Posted by Shantanu Naravane] Several recent articles (in The Economist, the Financial Times and the Wall Street Journal) highlight the spate of buybacks by blue chip companies over the last year, and raise some concerns arising out of this seemingly shareholder-friendly trend. The companies in the S&P 500 index bought US$500 billion of their own…
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RBI Allows FDI against “Legitimate Dues”
[Posted by Umakanth Varottil] Hitherto, an Indian company could issue shares to a non-resident against payment obligations only in certain circumstances. These related to “lump-sum technical know-how fee, royalty, External Commercial Borrowings (ECB) (other than import dues deemed as ECB or Trade Credit as per RBI guidelines) and import payables of capital goods by units…
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Report on Gender Diversity in Corporate Boards
[Posted by Umakanth Varottil] The issue of board diversity has acquired considerable prominence in recent times. Although there can be various hues to the concept of diversity, one manifestation relates to gender diversity and the requirement for women directors on corporate boards. What began as a useful management strategy has acquired regulatory overtones. Several countries…
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Supreme Court on Non-Compete Fee Under the Takeover Regulations
[Posted by Umakanth Varottil] [The following post is contributed by Yogesh Chande, Associate Partner, Economic Laws Practice. Views are personal] The Supreme Court passed an order setting aside the Securities Appellate Tribunal (SAT) decision [and order of SEBI] on payment of “non-compete” fee under the erstwhile SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997…
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Typographical Errors Ailing Securities Laws?
[Posted by Umakanth Varottil] [The following post is contributed by Vaneesa Abhishek, who is a securities lawyer and a former Legal Officer of the Securities and Exchange Board of India (SEBI)] Background The Securities Laws Amendment Act, 2014 (“2014 Act“) was notified recently. Section 1(4) of the 2014 Act provides that certain provisions that relate…
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SEBI’s Revisions to Corporate Governance Norms
[Posted by Umakanth Varottil] In April this year, SEBI had announced a revamped clause 49 of the listing agreement specifying the revised corporate governance norms to come into effect from October 1, 2014. This was to bring the SEBI norms in line with the Companies Act, 2013 (2013 Act). However, in certain material respects, the…
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Is levy of penalty mandatory and inevitable? – mindless/rote application of Supreme Court decision in Shriram?
[Posted by Jayant Thakur] (Note:- This article is my latest contribution to my monthly column on Securities Laws in Bombay Chartered Accountants’ Journal) Penalty is mandatory because Supreme Court says so, SEBI consistently and incorrectly holds Almost each and every SEBI order levying penalty relies on a Supreme Court decision in Shriram’s case (SEBI vs.…
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“Deposits” existing on 31st March 2014 – how to be treated under new Companies Act/Rules?
[Posted by Jayant Thakur] Since notification of the Companies Act, 2013 and Rules thereunder, certain transitional issues relating to “deposits” are causing concerns to numerous companies, big and small, listed and unlisted, public or private. They arise from the substantially modified definition of the term “deposits”. Many items of loans and other receipts that were…
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SAT Order on “Flash Crash”
[Posted by Umakanth Varottil] A few days ago, the Securities Appellate Tribunal (SAT) passed its order on an appeal by Emkay Global Financial Services Limited against the National Stock Exchange (NSE) and several investors in a case involving a “flash crash”. This case raises interesting legal and contractual issues, although they were substantially resolved through…