AuthorUmakanth Varottil

The Ineligibility of Collusive Transactions as “Financial Debt”: Part II

[Continued from here] Analysis and Observations Through its decision in Phoenix Arc, the Supreme Court has added to the wealth of jurisprudence under the IBC. At the same time, several questions remain. Collusive Transactions Perhaps the broadest and most impactful interpretation of the Court lies in the question of whether collusive transactions give rise at all to “financial debt” within the...

The Ineligibility of Collusive Transactions as “Financial Debt”: Part I

[Another post on this topic is available here]A three-judge bench of the Supreme Court of India on 1 February 2021 rendered important and interesting pronouncements on some aspects of the Insolvency and Bankruptcy Code, 2016 (IBC) in Phoenix Arc Private Limited v Spade Financial Services Limited. Speaking through Dr. Dhananjaya Y Chandrachud, J, the Court ruled that a collusive transaction cannot...

Andhra High Court Rejects Insider Trading Claims on Land

Rooted in preserving market integrity, the concept of insider trading emerged and has been ingrained in the context of the securities markets. Despite the well-understood nature of the subject-matter of insider trading, a question recently arose on whether the offence can be extended to the purchase and sale of land. In Chekka Guru Murali Mohan v. The State of Andhra Pradesh (decided 19 January...

Pump and Dump? SEBI Order against TV Anchor and Family

In a somewhat unconventional interim order, the Securities and Exchange Board of India (SEBI) issued a series of directions against CNBC Awaaz anchor Hemant Ghai, his wife Jaya Hemant Ghai and his mother Shyam Mohini Ghai. SEBI’s preliminary examination of prices of certain stocks indicated a pattern of trading that potentially violated the SEBI Act, 1992 and the SEBI (Prohibition of Fraudulent...

Supreme Court Affirms Expansive Locus Standi under Competition Law

The Supreme Court in Samir Agrawal v. Competition Commission of India (decided 15 December 2020) was concerned with some basic but important questions of law. Can a member of the public file information with the Competition Commission of India (CCI) alleging a violation of the provisions of the Competition Act, 2002 and thereby triggering an investigation by the regulatory authority? If aggrieved...

SEBI Consults on Risk Management Committee

Risk management has acquired a crucial status in corporate governance. Its importance tends to get accentuated in the wake of crises. The concept came to the forefront after the global financial crisis more than a decade ago, and it became entrenched in specific sectors such as banking and financial services that were severely affected by the crisis. Even industrial accidents such as the BP oil...

Karnataka High Court Decision in the Franklin Templeton Case

The Karnataka High Court yesterday issued its 336-page ruling on the highly contested winding up of six schemes of the Franklin Templeton Mutual Fund (“FTMF”). FTMF’s decision was the subject matter of challenge before various High Courts, and the Supreme Court directed a transfer of all related petitions to the Karnataka High Court, which held a mammoth virtual hearing over several days before...

SEBI Rules on Misapplication of IPO Funds

In an order issued yesterday involving Birla Pacific Medspa Limited (“BPML”), the Securities and Exchange Board of India (“SEBI”) was faced with an alleged misapplication of IPO funds by the company way back in 2011. Through a prospectus issued on June 29, 2011, the company raised Rs. 65.17 crores to establish “Evolve” Medspa centres across India, which constituted the primary purpose of the...

SEBI Tightens Reins over the Proxy Advisory Industry

Proxy advisory firms have acquired the status of an important corporate governance intermediary. This is not just globally, but also in India. They play a crucial role of providing voting advice to shareholders (particularly of the institutional variety). In India, the advent of the proxy advisory industry over the last year has invigorated the active participation of institutional shareholders...

Paper on Shareholder Remedies: Oppression, Prejudice and Mismanagement

Under company law, shareholders (particularly the minority) can resort to various remedies prescribed thereunder, such as oppression, prejudice and mismanagement. While Indian company law has incorporated versions of shareholder remedies since the mid-20th century, the design of the remedies as they currently operate finds place in sections 241 and 242 of the Companies Act, 2013 (the “2013 Act”)...

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