The Reserve Bank of India (RBI) last week issued a series of circulars liberalizing and streamlining its policies on various types of equity investments as well as on external commercial borrowings (ECBs). The key pronouncements are highlighted below: 1. Foreign Investment in “Other Financial Services” In the case of non-banking finance companies...
Withdrawal of Open Offer: A Debate Rekindled?
[The following post is contributed by Saumya Bhargava & Prateek Suri, who are Associates at AZB & Partners, New Delhi. Views expressed are personal.] [In an earlier post dated August 5, 2016, we had discussed an order relating to the open offer of Jyoti Limited in the context of circumstances under which an open offer is allowed to be withdrawn in India] Public announcement of an open...
Companies Mediation and Conciliation Rules: An Update
[The following post is contributed by Bhushan Shah and Neha Lakshman from Mansukhlal Hiralal & Company. The views expressed are personal] Section 442 of the Companies Act, 2013 (‘Act’) empowers the Central Government to constitute a panel of experts to mediate and settle disputes pending before the National Company Law Tribunal (‘NCLT’), National Company Law Appellate Tribunal...
NCLT: Revolutionizing the Realm of Corporate Litigation
[The following post is contributed by Shruti Khetan, who is a student at the West Bengal National University of Juridical Sciences] After a decade-long wait, the National Company Law Tribunal (‘NCLT’) and its appellate body, the National Company Law Appellate Tribunal (‘NCLAT’) have finally been constituted under sections 408 and 410 of the Companies Act, 2013 (‘Act’) with effect from June 1...
Call for Submissions: NLS Business Law Review
[The following announcement is posted on behalf of the NLS Business Law Review] The NLS Business Law Review is an initiative by the National Law School of India University to recognise and foster academic research and scholarship in corporate and commercial law. The law review intends to examine the interface between the myriad regulatory frameworks that impact doing business in India...
Briefing on Board Independence
The new edition of the NSE Quarterly briefing is on “Issues in Board and Director Independence” and is drafted by Professor “Bala” N. Balasubramanian. The executive summary is as follows: – Worldwide, corporate governance best practices and regulations recognise the need for boards and directors to be independent and objective. – In a country such as India, where concentrated...
Promoter Upside Sharing Arrangements in Listed Companies: SEBI Comes Down Hard
[The following post is contributed by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai. For another perspective on the topic, please see an earlier post on the Blog.] The Securities and Exchange Board of India (“SEBI“) has released a discussion paper (“Paper“) to regulate certain arrangements between private equity investors and the promoters/top...
Compensation Arrangements between Private Equity and Company Management: Corporate Governance Issues
In its board meeting held on 23 October 2016, the Securities and Exchange Board of India (“SEBI”) highlighted the issue of compensation arrangements agreed to by private equity (“PE”) firms with the promoters, directors and key managerial personnel (collectively, the “management”) of investee companies that are listed on the stock exchange, and certain corporate governance issues that emerged...
Supreme Court on Dishonour of Post-Dated Cheques Issued as Security
[The following post is contributed by Sneha Bhawnani, who is an Assistant Legal Advisor at Vinod Kothari & Co. She can be contacted at [email protected].] In the present era of commercial dealings, the issuance of post-dated cheques has become a common phenomenon and therefore the significance of such post-dated cheques cannot be under-emphasized. In this context, a predominant question...
SAT on Merchant Bankers’ Obligation in a Public Offering
Background: History Repeats Itself The Securities and Exchange Board of India (“SEBI”) has in recent year initiated actions pertaining to the alleged lack of accurate disclosures in prospectuses issued by companies in public offerings of securities. One high profile case involved the initial public offering (“IPO”) of DLF Limited wherein SEBI issued an order restraining DLF, its directors and CFO...
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