[This guest post is contributed by Yashesh Ashar and Swati Adukia. They are tax professionals and specialize in mergers and acquisition tax. Please note that the views are personal] I. Introduction The Securities and Exchange Board of India (“SEBI”) notified the SEBI (Real Estate Investment Trusts) Regulations, 2014 (“REIT Regulations”)...
Understanding the Exit Rights Provided by Private Companies
[The following guest post is contributed by Ananya Banerjee, a 5th Year Student of University of Calcutta, Department of Law] Investing in companies (especially in startups) involves a huge risk. For this reason, financial investors look for exit rights which allow them to exit the company with a high return on the investment amount. While the aim of the strategic investors is not to...
Case-Study Evidence of Shareholder Activism
We have previously highlighted the rise of shareholder activism in India (here and here). Activism has been aided by regulatory reforms that have enlarged shareholder participation. In addition, market changes have resulted in previously passive institutional investors becoming more active in recent times. They have further been supported by the emergence of a growing and vibrant proxy advisory...
Exit Offer to Dissenting Shareholders
[The following guest post is contributed by Yogesh Chande, who is a Partner at Shardul Amarchand Mangaldas, Advocates & Solicitors. Views of the author are personal. Yogesh can be reached at [email protected]] Subsequent to my guest post dated 30 March 2014 in connection with section 13(8) and section 27(2) of the Companies Act, 2013, SEBI issued a discussion paper on 1 December...
Approval of Trade Facilitation Agreement in India – A Brief Overview
[The following guest post is contributed by Ananya Banerjee, a 5th Year Student of University of Calcutta, Department of Law] In another effort to promote the ease of doing business in India and to create a more business friendly environment in India, the Union Cabinet has, on February 17, 2016, approved the proposal for notification of commitments under the Trade Facilitation Agreement...
Supersession of Bond Terms by State Legislation Disallowed
In Kalyan Janta Sahakari Bank v. State of Gujarat, a division bench of the Gujarat High Court was concerned with whether a legislation passed by the Gujarat State Legislature can unilaterally alter the terms of an issue of bonds by the government company to the detriment of the bond investors. The Court answered in the negative by striking down the legislation on grounds of lack of legislative...
The Companies Law Committee on Section 117 and Appointment and Remuneration of Managerial Personnel
[The following guest post is contributed by Amitabh Robin Singh, who is an Associate at DSK Legal] In an earlier post, this author had discussed the proposed changes made by the Companies Law Committee (“Committee”) to Chapter 3 (Prospectus and Allotment of Securities) of the Companies Act, 2013 (“2013 Act”). In this post, a particular observation of the Committee, which stretches between...
Whether two Indian parties can derogate from domestic law in the context of arbitration
[The following guest post is contributed by Abhik Chakraborty, Fourth Year, NUJS, Kolkata] In September 2015, the Madhya Pradesh High Court in Sasan Power Ltd. v North American Coal Corporation held that two Indian parties can opt out of domestic law in the context of arbitration. On the contrary, in June 2015, the Bombay High Court in Adhar Mercantile Pvt. Ltd. v Shree Jagdamb,[1] followed the...
Summary: Recommendations of the Companies Law Committee
[The following post is contributed by Bhushan Shah and Labdhi Shah from Mansukhlal Hiralal & Company] The Companies Act, 2013 (2013 Act) was enacted with a view to bring Indian company law in tune with global standards. However, as is the case with every new legislation, the enactment of this Act also led to ambiguity and confusion within the industry. The Government continued to...
Cashless Employee Stock Option Scheme and Insider Trading Regulations
Last year, the Securities and Exchange Board of India (“SEBI”) issued a guidance note clarifying certain matters regarding employee stock option plans (ESOPs) and their implications under the SEBI (Prohibition of Insider Trading) Regulations, 2015 (the “Insider Trading Regulations”). Specifically, it stated that the “contra-trade” restrictions do not apply to the exercise of stock options by...
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