[The following guest post is contributed by Vinod Kothari and Aditi Jhunjhunwala of Vinod Kothari & Co. The authors may be contacted at [email protected] and [email protected] respectively.] The 9-lakh (0.9 million) odd private companies in India have already been subjected to unprecedented compliances required under the Companies Act, 2013 (the “Act”) given the financial year-end...
Committee to Review the Companies Act
Although the Companies Act, 2013 is brand new and yet to be brought into force in its entirety, there is already a lot of discussion about the need to reevaluate the legislation. The Government has taken initial steps to address some of the issues by way of the Companies (Amendment) Act, 2015. However, as we have previously noted, the amendments are not very significant and are mostly procedural...
Liberalization of Investments by Non-Resident Indians
Non-resident Indians (NRIs) have long been considered as a separate category of investors who have enjoyed some privileges compared to other classes of foreign investors. NRIs have been allowed to investment either on a repatriable basis (with more stringent norms) and on a non-repatriable basis (with less stringent norms). Earlier this week, by way of Press Note No. 7 (2015 Series), the...
Dissecting SEBI’s Powers Under Section 11B of the SEBI Act, 1992: Part 3
[The following guest post is contributed by Kanwardeep Singh Kapany, and is a continuation of previous posts in Parts 1 and 2] Direction to disgorge does not amount to double jeopardy The expression disgorgement is a common term in developed markets across the world, though it is new to the securities market in India. The said expression connotes repayment of ill-gotten gains that is imposed on...
Dissecting SEBI’s Powers Under Section 11B of the SEBI Act, 1992: Part 2
[The following guest post is contributed by Kanwardeep Singh Kapany, and is a continuation of a previous post in Part 1] Retrospective application Section 11B was introduced to the statute through the 1995 Amendments with effect from January 25, 1995. In a certain case before the Supreme Court of India,[1] the misconduct had taken place in the months of October and November 1993. When directions...
Dissecting SEBI’s Powers Under Section 11B of the SEBI Act, 1992: Part 1
[The following guest post is contributed by Kanwardeep Singh Kapany, a 5th year B.S.L.LL.B student at ILS Law College, Pune. The author can be contacted at [email protected]. In this three-part series, the author analyzes the provisions of Section 11B of the SEBI Act, 1992 which confers wide powers on SEBI to regulate the capital markets. This provision has been used extensively by SEBI...
Financial Assets and the Rights of Nominees and Successors
(The following guest post is authored by Sumit Agrawal, who is an Assistant Legal Advisor, Securities and Exchange Board of India at its Head Office in Mumbai. He can be contacted at [email protected]. Views are personal.) There is a frequent debate as to who will own an investor’s assets (shares and debentures, life insurance, provident fund and gratuity account, PPF, saving account...
Bombay High Court Pronounces on FDI Policy
It is not very often that courts in India have had the occasion to interpret and rule on the Foreign Direct Investment (FDI) Policy of the Government of India. Earlier this month, the Bombay High Court issued its ruling in IDBI Trusteeship Services Ltd. v. Hubtown Ltd., which relates to the legalities of a foreign investment structure that involved compulsory convertible debentures (CCDs) issued...
Companies (Amendment) Act, 2015 Notified
The Companies (Amendment) Bill was passed by the Rajya Sabha earlier this month. We had discussed the broad nature of the changes introduced. Now, the amendment has become law in the form of the Companies (Amendment) Act, 2015 as it has received the assent of the President and has been notified in the Official Gazette . Update – May 29, 2015: As some of you have pointed out in the comments...
Designing Executive Compensation for Banks and Financial Institutions
When it comes to banks and financial institutions, there are additional corporate governance requirements apart from those applicable to other types of companies. This is because the operation of banks and financial institutions affect the interests of a constituency other than shareholders, namely deposit holders and other creditors. Hence, executive compensation practices need to take these...
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