Last week, the policy making machinery within the Government took the farthest steps so far towards permitting FDI in multi-brand retail. Reports indicate (here, here and here) that majority foreign ownership (up to 51%) will be allowed, although this is likely to be accompanied by a number of conditions including minimum foreign investment (said to be $100 million). Although further procedures...
Enforceability of “Side Letters”
Background It is customary for parties to enter into “side letters” in corporate and commercial transactions. Side letters are documents which are ancillary to the principal transaction documentation. There are a number of reasons why parties could potentially enter into side letters, rather than include their subject matter in the principal documentation. Side letters are useful when parties...
Announcements: Calls for Papers
(The following announcements may be of interest to our readers although they do not directly relate to the subject-matter of this Blog) A. Socio-Legal Review Socio-Legal Review welcomes contributions for its eighth volume to be released in 2012. About the Journal The Socio-Legal Review (SLR) is a student-edited, peer-reviewed interdisciplinary journal published annually by the Law and Society...
Companies Bill Rekindled
The recent change at the helm of affairs of the Ministry of Corporate Affairs (MCA) has rekindled the discussion on the Companies Bill. Newspaper reports indicate that the new Bill is expected to be introduced in Parliament during the monsoon session that begins August 1. The reports also highlight some key areas recently at the forefront. It has been suggested that SEBI will be conferred powers...
Miscellaneous
The following developments and readings may be of interest: 1. Sahara: Public Offering vs. Private Placement We have been following the Sahara case as it involves the crucial question of what differentiates a public offering from a private placement of securities under Indian company law and securities regulation. Newspaper reports (here, here and here) indicate that the Supreme Court has now...
Voluntary Guidelines on Environmental Social Governance
The Ministry of Corporate Affairs (MCA) this week issued the National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business (ESG Guidelines), which represents a significant and substantial effort in enhancing the protection of stakeholder interests in the corporate sector. The concepts of stakeholder interests and corporate social responsibility (CSR) have...
The New Microfinance Institutions Bill
Over the last year or so, there has been a serious debate about the nature of regulation governing the microfinance sector. In view of the debacle in Andhra Pradesh, the Reserve Bank of India (RBI) had appointed a committee under the chairmanship of Mr. Malegam to review issues pertaining to the sector. The committee submitted its report in January this year. In view of these events, the...
RBI’s Changes to Foreign Investment Policy
The Reserve Bank of India (RBI) has announced some policy measures as follows: 1. Issue of Shares for Consideration Other Than Cash In its recent foreign direct investment (FDI) policy, the Government of India had announced additional methods for issue of shares for consideration other than cash, such as: (a) import of capital goods/ machinery/ equipment (including second-hand machinery); (b) pre...
Infrastructure Development Fund
The Ministry of Finance has issued a press release that paves the way for setting up “Infrastructure Debt Funds (IDFs) in order to accelerate and enhance the flow of long term debt in infrastructure projects for funding the government’s ambitious programme of infrastructure development.” IDFs are envisaged to be suitable vehicles that enable raising debt to finance infrastructure projects...
UK Bribery Act: Impact on Indian Companies
The UK Bribery Act 2010 is scheduled to become effective July 1, 2011 following the issuance of detailed guidance in March. This is expected to have a significant impact on Indian companies having a demonstrable business presence in the UK. In this behalf, an article in the VC Circle by Saionton Basu and Tom Clark details the various steps to be taken by affected Indian companies to “review or...
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