AuthorCA Jayant Thakur

Will the new Section 90 unravel benami holdings in companies? Or will it misfire?

Section 90 and related provisions of the Companies Act, 2013, have been brought into force on 13th June 2018 alongwith related Rules. I had discussed earlier here some issues on Section 90, at a time when the new provisions were made part of the Act through the Companies Amendment Act 2017 but were not yet brought into force. Now that they have been duly brought into force and require action...

Front running – ill-conceived law and inequitable orders of SEBI

SEBI has passed an order on 8th May 2018 in a case of front running. On the face of it, there is nothing distinctive. The law relating to front running has seen ups and downs in the past, with even contradictory decisions of SAT, but the Supreme Court ([2017] 144 SCL 5 (SC)) largely settled the matter. Yet, this order raises and reminds of concerns that the law has not been thought through well...

Being Facebook ‘friends’/’likes’ on each other’s photos deemed sufficient by SEBI to allege ‘connection’ for insider trading

In an earlier post, I had written about how being connected as ‘friends’ on Facebook was deemed by SEBI to be significant enough to allege that the parties were ‘connected’ for purposes of insider trading. In that case, however, there was other alleged connection too. SEBI has yet again examined Facebook profiles for to pass a similar interim order. It found that a businessman and his...

Board meetings by video-conferencing – whether available only if company allows, or whether director can insist on it?

The NCLAT has held recently (in Achintya Kumar Barua vs. Ranjit Barthkur ([2018] 91 taxmann.com 123 (NCL-AT)) that if any director desires to attend board meetings by video conferencing, the company is bound to allow attendance in this manner. In other words, it is not up to the company or at the discretion of the Chairman/Company Secretary whether or not to allow attendance by video conferencing...

SEBI’s order against Price Waterhouse firms/partners

SEBI passed an order on 10th January 2018 against CA firms practicing under the brand/banner of Price Waterhouse and two of its partners. The Order debars them from issuing, for two years, audit certificates of listed companies, compliance certificates under specific securities laws of listed companies & SEBI registered intermediaries, etc. It has also required the auditor firm, jointly with...

New Section 90 in Companies Amendment Act 2017 – aims at benami shareholders, shoots everyone else but them

‘Shell companies’ have been in the news recently. On how monies are laundered, laws are avoided/evaded, benami properties are held, etc. through such companies. Curious is that even shares of these companies may be held benami, making it difficult to catch true culprits. There are laws to deal with benami holdings including the most prominent Prohibition of Benami Property Transactions Act, 1988...

Supreme Court’s decision on the Competition Act raises concerns

[Guest post by Varun Thakur, BA.LL.B fourth year student at National Law University, Jodhpur.] The Supreme Court of India (‘SC’ or ‘the Apex Court’) has for the first time ruled on the substantive provisions under the Competition Act, 2002 (‘Competition Act’ or ‘the Act’) in the case of Competition Commission of India (‘CCI’) v. Coordination Committee of Artists and Technicians of WB Film and...

SEBI accuses statutory auditors for fraud, etc.

SEBI has passed an interim order against various persons which also doubles up as a show cause notice (“SCN”) on the erstwhile statutory auditors (“the Auditors”) of a listed company. The Auditors are asked to show cause why directions should not be issued to debar them from issuing certificates under several specified securities laws. While directions have been issued against the concerned...

Disgorgement of profits – profits made in violation of SEBI directions vs. profits made in violation of law

In perhaps a first, SEBI has ordered impounding of profits that were made through legitimate and non-manipulative trades though in violation of SEBI directions not to trade. An earlier order against certain persons had “prohibited them from buying, selling or dealing in the securities market, directly or indirectly, till further orders.”. While such directions were in force, such parties...

SEBI passes first order on newly acquired jurisdiction commodity markets – but also raises concerns why there are dual bans

SEBI has passed perhaps the first adverse order on commodity trading after having acquired jurisdiction over this field from FMC. This order coincidentally comes almost exactly one year after this jurisdiction was proposed for it in Finance Bill 2015. The order is also curious as it specifically passes wider/dual bans debarring parties not only from commodity markets but in transactions of...

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