Earlier this month, the Supreme Court in Religare Finvest Limited v. State of NCT of Delhi (2023INSC819) considered the question whether the transferee bank in a merger can be fastened with corporate criminal liability for offences committed by the officials of the transferor bank prior to a merger of the two entities. The Court answered in the negative given the specific facts and circumstances...
NCLT Order in Zee-Sony Merger Reiterates High Onus on Objectors
The proposed merger of Zee Entertainment Enterprises Limited with Sony’s India operations (through its entity Culver Max Entertainment Private Limited) has attracted considerable attention. This is essentially due to some governance and financial circumstances surrounding the Zee group. Zee Entertainment was the subject matter of shareholder activism spearheaded by an institutional investor...
Empirical Analysis of Legal Fees Data for Indian Companies
[Srinivasan Sankaraguruswamy is an Associate Professor of Accounting at the NUS Business School, National University of Singapore and Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore] A significant challenge confronts legal departments of companies. On the one hand, the demand for legal services from external counsel continues to skyrocket given...
ClientEarth-Shell: English Court Rejects Climate-Focused Shareholder Derivative Suit
[This post was first published in the Oxford Business Law Blog] In a closely watched litigation in the climate change space, ClientEarth, a non-profit environmental law organisation based in the United Kingdom, instituted a shareholder derivative suit against the directors of Shell plc. The claim is based on the allegation that the directors breached their duties under the Companies Act 2006 by...
“Private Placement”: Syntactic Interpretation of a Financing Engagement Letter
Recently, the England and Wales High Court (Commercial Court) had the occasion in Cantor Fitzgerald & Co. v. Yes Bank Limited [2023] EWHC 745 (Comm) (31 March 2023) to consider contractual language in capital market transactions. While the contract itself was governed by English law, the ruling has implications on contractual interpretation more generally, in addition to its relevance to...
SEBI’s Proposals to Enhance Corporate Governance by Empowering Shareholders
Over the last decade and, in particular, following the enactment of the Companies Act, 2013, the Securities and Exchange Board of India (SEBI) has been gradually and consistently strengthening the governance norms pertaining to listed companies. Among other measures, SEBI has sought to focus on two specific matters, viz., (i) enhancing transparency in corporate matters; and (ii) empowering...
Bombay High Court Reiterates Distinction Between Forward Contracts and Options in Securities
The distinction between a forward contract for sale and purchase of securities in a company on the one hand and the creation of an option in relation to such securities on the other hand bears considerable relevance when it comes to their enforceability. While the Securities Contracts (Regulations) Act, 1956 (SCRA) and various notifications issued therein by the Central Government as well as the...
Liability of Company Secretary for Misstatements: SC Remits Case to SAT
In November 2022, we had discussed a somewhat curious ruling of the Securities Appellate Tribunal (SAT) in V. Shankar v. Securities and Exchange Board of India which exonerated the Company Secretary of Deccan Chronicle Holdings Limited (DHCL) from liability for certain misstatements and incorrect disclosures made by the company. We had noted that the SAT largely arrived at the ruling on first...
The Regulatory Progression of ESG in India
The concept of corporate social responsibility (CSR) has had a pivotal status in the debates surrounding corporate law and governance at the turn of the century. Although CSR was ensconced in the idea of voluntarism by which companies and their boards are invited to pay attention to the interests of various constituencies affected by a company’s activities, in some jurisdictions such as India it...
IFSCA Report on the Design of Variable Capital Companies
The choice of business form available in any jurisdiction is critical to the establishment of a vibrant fund industry. While several markets have historically relied on organisational structures such as the limited partnership, the age-old private trust formulation has constituted the mainstay of the fund industry in India. Most fund structures (including mutual funds and alternative investment...
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