In the context of Rajat Gupta’s conviction in the US, my column published on June 25 in Business Standard underlines how Indian law on insider trading operates more stringently than in the US. The response and feedback has been varied. Many find fault with the regulator for not being effective with use of its powers, and lacking in enforcement skills. Others feel that unless an accused is...
If you are interested in working on Indian financial sector policy, read on
The Financial Sector Legislative Reform Commission (“FSLRC”), with which I am associated as a consultant is actively involved in re-writing financial sector law for India. Ajay Shah has this post on his blog about opportunities to work with the macro-finance group at the National Institute of Public Finance and Policy: This is a very important project for building our national...
Of NGOs, FDI and Corporate Governance
My fortnightly column published in today’s edition of Business Standard draws a line across (i) the government’s attitude towards companies it owns and lists on stock exchanges to raise public money; (ii) how the government can choke non-governmental organisations that protest well; and (iii) parallels between activism against bad corporate governance by the government and activism...
Regulating use of Internet can stifle
SEBI’s move to regulate the usage of e-mail, internet and electronic means of communication by employees of market intermediaries, and to make the compliance officer liable, was commented upon recently by Umakanth here. However, well-intentioned, SEBI’s move is not implementable, poses serious issues for the office of the compliance officer, and can have the unintended consequence of stifling...
Use Ex Parte Powers Abstemiously
An “ad interim, ex parte” order passed by SEBI, directing companies in the Sahara Group not to raise funds by way of placement of their debentures, led to a debate here over interim reliefs granted by courts, after the Allahabad High Court stayed SEBI’s order. The Supreme Court has now refused to stay the stay granted by the Allahabad High Court. Sections 11 and 11B of the SEBI Act, 1992 confer...
SEBI PLUGS LOOPHOLE IN BROAD-BASED CRITERIA FOR FIIs
The Securities and Exchange Board of India (“SEBI”) has issued a circular dated April 15, 2010 clarifying its stand on broad-based criteria for registration as foreign institutional investors (“FIIs”). See: SEBI has clarified that if an entity has a feature of its structure, multiple classes of investors and multiple pools of investments within the same entity, each such pool ought to comply with...
Public Company shares cannot be fettered at all, says Bombay HC
The Bombay High Court has ruled that any pre-emptive rights over shares in public limited companies are patently illegal in view of the principle of “free transferability” enshrined in Section 111A of the Companies Act, 1956 (“the Act”). This revives the debate on enforceability of shareholder agreements and joint venture agreements governing public limited companies. In the case of Western...
SAT on indirect acquisitions – correct in letter and spirit
Earlier this month, the Securities Appellate Tribunal (“SAT”) opined on the computation of the minimum offer price for an indirect takeover of a listed company. An interesting critique of this opinion was published on this blog the next day. The SAT had disposed of two appeals (Appeals No. 137 and 139 of 2009) by a common order. I respectfully disagree with the critique on the blog. In my view...
Warrants and Voting
My friend Jayant Thakur posted a critique on July 31 on the recent SEBI Order in the case preferential allotment of warrants to promoters. Umakanth dealt with the element of potential prohibition of voting in areas of conflict of interest on August 1. Here is a piece I wrote in the Business Standard today, with a slightly different perspective on the concept of preferential allotment and deals...
Delisting Regulations could make fresh delistings an impossibility
Today’s Business Standard published this column from me on the newly notified SEBI (Delisting of Equity Shares) Regulations, 2009. The new law makes delisting next to impossible.
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