The report of the Bimal Jalan committee on “Review of Ownership and Governance of Market Infrastructure Institutions” is now available on SEBI’s website for public comments (due on December 31, 2010). The report makes a number of key recommendations regarding the ownership structure and corporate governance norms pertaining to three key institutions providing securities market infrastructure...
Corporate Criminal Liability: The Iridium/Motorola Case
The judgment of the Supreme Court in Iridium India Telecom Ltd. v. Motorola Inc. is now available on JUDIS (date: 20 October 2010). M.J. Antony has a summary and analysis of the case in the Business Standard: The question of punishing a corporation came up recently in the Supreme Court in a criminal case filed by Iridium India Telecom Ltd against Motorola Incorporated. The allegations were...
Disclosure as an Instrument of Securities Regulation
The almost universally accepted strategy for securities regulation is to require issuers to make adequate disclosures in offering documents. The role of the regulators is to determine the extent of disclosures required. It is then left to investors to rely upon the disclosures and to make a decision as to whether to invest or not. Sophisticated investors such as financial institutions rely on...
Companies Bill to be Deferred
A few weeks ago, newspaper reports had suggested that the Companies Bill, 2009 may be presented in amended form during the winter session of Parliament and that it may even be enacted by the end of the year. That was somewhat intriguing considering the magnitude of the discussions before the Parliamentary Standing Committee on Finance (SCF) and the drastic changes suggested by it to the Bill in...
Two Global Indicators: Measuring India’s Performance
Doing Business Doing Business 2011, a co-publication of the World Bank and the International Finance Corporation, was released earlier this week. As far as India’s position is concerned, nothing significant has altered compared to its ranking in last year’s report. Of a total of 183 countries covered in the report, India ranks 134 (one place above its ranking of 135 in the 2010 report). Even...
More Hurdles for LLPs
As we have previously noted on this Blog, the popularity of limited liability partnerships (LLPs) has not met with expectations since introduction of that business vehicle in April 2009. While the Government has taken certain steps to boost the utility of LLPs, such as by considering the possibility of foreign investment into LLPs discussed in this paper issued by the Department of Industrial...
Changes to Capital Markets Regulations
On October 25, 2010, SEBI announced a number of changes to regulations governing capital markets. 1. Public offerings. A new regime is being established for IPOs by insurance companies. Rather than issue a new set of guidelines for that industry, SEBI has decided to apply the ICDR Regulations, 2009 along with additional industry-specific disclosures such as specific risk factors, overview of the...
Advisory Boards for Indian Companies
About a week ago the Economic Times’ Corporate Dossier carried two columns (here and here) highlighting the growing popularity of advisory boards in Indian companies. The individuals on such boards perform advisory functions and almost no monitoring functions. In that sense, an advisory board is distinct from the statutorily required board of directors of a company. As one column notes: Fiduciary...
The Currency Conundrum
The financial press has been abuzz with discussions and commentaries on the recently initiated “currency war”. While much of the discussion is deeply embedded in macro-economics, the Critical Twenties blog has a useful overview of the tricky issues involved and their possible impact on the Indian economy, written in a manner that is palatable to the non-economist.
Disclosures on Management Changes
The saga involving the removal of SKS Microfinance’s chief executive raises a number of issues relating to corporate governance as well as securities regulation. One such issue pertains to the nature of public disclosures made regarding the removal of the chief executive, which acquires prominence considering SKS is a public listed company. Circumstances that have panned out over the last few...
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