AuthorCA Jayant Thakur

SEBI’s recent interim Order and findings in Zenith’s case again present many disturbing things, as appears from SEBI’s allegations in the orders. How Promoters can easily divert to related parties monies belonging to creditors and shareholders. How existing laws cannot prevent them and even their enforcement and recovery of lost monies could be a prolonged process. Thus creditors have to...

The ITAT, Mumbai has held1 that the premium paid by the company on buyback of shares of a warring shareholder group is deductible as business expenditure in the hands of the company. Thus, it allowed the premium of Rs. 6.82 crores (over the face value of Rs. 8.40 lakhs) paid for buying back 34% of the shares held by such group. Though the decision is similar to a few earlier decisions on...

In continuation with earlier post on the recently notified SEBI(Investment Advisers) Regulations, 2013 (“the Regulations”), the following further points are worth noting. 1)     The Regulations apply to all Investment Advisers giving investment advice. They are required to register themselves with SEBI. 2)     The term investment advice has been defined to...

SEBI has released today the SEBI (Investment Advisers) Regulations, 2013, to come into effect from the ninetieth day of their publication. While a more detailed post will follow, here are some first impressions. SEBI has cast a very wide net, almost amounting to an overkill.  Every Investment Adviser, as defined, will be required to register with SEBI to carry on business of providing...

It may be recollected that the Working Group constituted by Reserve Bank of India gave a report in August 2011 (discussed here) making recommendations on changes to the regulation of non-banking financial companies (NBFCs). As a next major step towards implementation several of these recommendations, though in a modified form, are proposed to be implemented. Reserve Bank of India has issued a set...

As highlighted in an earlier post, the Securities Appellate Tribunal (SAT) has held that front running, carried out by a non-intermediary, is not in violation of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”). The facts, as narrated in the SAT order, are simple enough. An employee...

The Securities Appellate Tribunal has given an interesting ruling that front running by an investor (who is not an intermediary) is not a violation of the SEBI FUTP Regulations 2003. It held this essentially on two grounds. Firstly, it held that the 2003 Regulations consider front running as a violation only if it is carried out by an intermediary but not if carried out by others. Secondly...

SEBI’s Order in case of Arun Jain debarring him for 2 years for insider trading is a little disturbing. It questions the perceived sanctity and finality of consent orders and whether settlement by consent settles all actions possible for a particular act or omission. Or whether, even after settlement and payment of settlement amount, SEBI may yet take action under another set of provisions...

As has been widely reported, the Supreme Court rejected all the contentions of the two Sahara companies (“Saharas”) against the order of SAT which in turn was against the order of SEBI. The matter of course is far more complex than being a linear sequence of orders and appeals and has several detours to Allahabad and other courts but, in essence, it is sufficient to consider this series of Orders...