AuthorUmakanth Varottil

Paper on Shareholder Stewardship in India

I have uploaded on SSRN a paper titled “Shareholder Stewardship in India: The Desiderata”, whose abstract is as follows: The goal of this paper is to examine whether the stewardship code, which emanated in circumstances that are specific to the United Kingdom (UK), is capable of transposition to other jurisdictions that experience different corporate structures as well as legal and institutional...

MCA’s Proposals for Overhauling the Audit Industry

In corporate governance parlance, auditors are considered to be key “gatekeepers”. However, governance failures both in India and around the world have pointed fingers towards the role of auditors. This has led to a series of reforms that impose greater stringency on auditors and the audit process. For example, the audit provisions in the Companies Act, 2013 (the “Act”)  have been designed...

Takeover of Unlisted Companies: A New Route

Squeeze out of minority shareholders of companies has been a controversial area. As a co-author and I had discussed, there are a number of methods by which squeeze outs can be effected in Indian companies. By way of a recent set of notification and rule-making efforts, the Ministry of Corporate Affairs (MCA) has just added another method that would be applicable to unlisted companies. Among the...

A Book from the Blog: “The Reform Decade: Corporate and Commercial Law in India”

It has been nearly two years in the making, but a book to commemorate the tenth anniversary of the IndiaCorpLaw Blog is now out. Published by the Eastern Book Company, it is titled “The Reform Decade: Corporate and Commercial Law in India”. In this volume, we have curated and edited several blog posts in the form of articles, which we divide thematically into 11 parts. These are: Company Law...

SEBI’s Deferral of the Chair-CEO Separation

Following the Kotak Committee recommendations, the Securities and Exchange Board of India (SEBI) in May 2018 announced that the top 500 Indian listed companies must mandatorily separate the roles of the chair and CEO (or managing director) to prevent a concentration of power in a company’s leadership structure. Moreover, SEBI stipulated that the chairperson should not be related to the CEO. These...

NCLT Finds Cross-Border Demergers Impermissible under the Companies Act

An important question arose before the National Company Law Tribunal (NLCT), Ahmedabad bench. Are only cross-border mergers and amalgamations permitted under section 234 of the Companies Act, 2013 (the “Act”), or does the provision also encompass cross-border demergers and other similar transactions? The NCLT answered that the scope of section 234 is narrow, and covers only cross-border mergers...

Some Comments on NCLAT’s Ruling in the Tata-Mistry Case

Last week, the National Company Law Appellate Tribunal (NCLAT) pronounced its ruling in the Tata-Mistry case. It held that the removal of Mr. Cyrus Mistry as executive chairman by the board of Tata Sons was illegal, and called for his reinstatement to that position. It also decided that consequential actions taken in the interim, including the appointment of a new executive chairman were illegal...

Indian Insolvency Proceeding Secures First Recognition under Chapter 15 of the US Bankruptcy Code

[Rahul Kanoujia and Tharun Chowdary are 3rd-year law students at Gujarat National Law University] Chapter 15 of the United States (US) Bankruptcy Code provides a framework through which bankruptcy courts recognize foreign insolvency proceedings. In 2005, the US adopted the Model Law on Cross-Border Insolvency introduced in 1997 by the UNCITRAL to encourage the treatment of multinational...

SEBI’s Denial of Relief to Pledgees in the Karvy Case

We had last month discussed the ex parte ad interim order passed by the Securities and Exchange Board of India (SEBI) wherein the regulator found that Karvy Stock Broking Limited (KSBL) had wrongfully pledged securities belonging to its clients to various lenders in exchange for funds borrowed. Since then, four lenders, (i) Bajaj Finance Limited, (ii) ICICI Bank Limited, (iii) HDFC Bank Limited...

Front Running and Circumstantial Evidence (Matrimonial Websites Including)

Securities frauds such as insider trading and front running raise insurmountable hurdles for regulators because there is often no evidence, not even a smoking gun. Hence, regulators bear the burden of painstakingly piecing together several bits of circumstantial evidence that, as a whole, might be sufficient to convince a court or tribunal of the elements of a breach of the appropriate...

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