Blog Posts
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A New Theory of Commercial Disparagement
[Posted by V. Niranjan] An earlier post had noted recent decisions of the Delhi High Court on the issue of comparative advertising and commercial disparagement. It is becoming increasingly commonplace today to see advertising battles fought out in Courts. A recent decision of the Madras High Court, however, has substantially changed the law on the…
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Rating the Raters
[Posted by Umakanth Varottil] Even since the subprime crisis erupted last year, there has been an extensive debate about the role of credit rating agencies in exacerbating the crisis. Questions have been raised whether the rating agencies ought to have raised the red flag much earlier than they actually did, thereby protecting the interests of…
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Difficulties in Insider Trading Actions
[Posted by Umakanth Varottil] One usually tends to lament that the Indian securities regulator, SEBI, has been unsuccessful yet in its prosecution of insider trading cases. Several high profile cases were initiated by SEBI only to be overturned by the appellate authorities. This tends to be on account of the fact that insider trading cases…
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Daga Capital – A decision with implications for trade in shares and securities
[Posted by Shantanu Naravane] In a case decided less than a month back, a special (3 member) bench of the Bombay ITAT considered and decided a number of tax issues arising with respect to entities dealing in shares and securities. Given the considerable attention devoted on late to financial institutions and mutual funds, this decision…
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Listed Government Companies and Corporate Governance: A Supplement
[Posted by Umakanth Varottil] A previous post on this Blog by Mr. Jayant Thakur raises valid issues regarding corporate governance and government-owned companies. Although I am in agreement with the position stated, it may be useful to highlight certain other complexities this matter gives rise to. I initially began by writing a comment to his…
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Listed Government Companies – Violations of Corporate Governance requirements – early orders of SEBI
[Posted by Jayant Thakur] Gail, ONGC, Indian Oil Corporation, etc. have, as per Orders of Adjudicating Officer (see, e.g., Indian Oil order here and others available on SEBI site) allegedly violated Clause 49 of the Listing Agreement since they allegedly delayed the appointment of Independent Directors. These orders are perhaps of the earliest of orders…
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Legality of ‘Exotic’ Derivatives – Part II
[Posted by V. Niranjan] In a previous post, I had discussed the preliminary and procedural aspects of the decision of the Madras High Court on legality of derivative transactions. This post considers the substantive aspects of the decision. A description of the nature of the transaction is available in the previous post. The challenge to…
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SUPREME COURT RULES ON JURISDICTION IN CASE OF CONFLICT BETWEEN THE ARBITRATION ACT AND THE COMPANIES ACT
[Posted by Venugopal Mahapatra] In the case of Sumitomo Corporation v. CDC Financial Services (Mauritius) Ltd. and Ors., delivered by a two judge bench of the Supreme Court, the basic issue was whether, in case of a conflict, Section 10(1)(a) of the Companies Act, 1956 would take precedence over Section 50 of the Arbitration and…
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Companies Bill: New Entities
[Posted by Umakanth Varottil] The Companies Bill, 2008, which has been introduced in the Lok Sabha, contains two entities that are fairly novel in the Indian corporate scenario, and it might be useful to briefly discuss these two types of entities. They are: (i) one person company (OPC); and (ii) “small” company. One Person Company…
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Misrepresentation by a Bank – Consequences – Rajshree Sugars v. Axis Bank
[Posted by Umakanth Varottil] (In the following post, our guest contributor Karthik Seshadri examines the issue of misrepresentation arising out of the judgment of the Madras High Court in Rajshree Sugars v. Axis Bank. For a background of the case and issues involved, please see Niranjan’s earlier post) In what can be termed as a…