[The following post is contributed by Mandar Kagade, who is a Policy Analyst at the Bharti Institute of Public Policy, Indian School of Business] The United States Congress recently passed the Consolidated and Further Continuing Appropriations Act, 2015 that made headlines for reasons not at all related to appropriations; it was in the news rather for including provisions that repealed the so...
Disqualification of Directors: A Dichotomy in the Companies Act, 2013
[The following post is contributed by Nivedita Shankar, who is a Senior Associate at Vinod Kothari & Company. She can be contacted at [email protected]] In case a director were to incur disqualification under section 164(2) of the Companies Act, 2013 (the “Act, 2013”), then such director shall not be eligible to be re-appointed as a director of that company or be appointed in other...
Flexibility for Investments by Trusts
Trusts in India are governed by a colonial-era legislation, the Indian Trusts Act, 1882. This legislation severely restricts the investments that trustees may make out of trust funds. Section 20 of the Trusts Act provides a list of instruments into which the trustees could invest the trust funds. These include securities of the type that were issued in the colonial period, including “promissory...
Paper on Limited Liability Partnership Law in India
Professor Afra Afsharipour has a paper titled The Advent of the LLP in India, the abstract of which is follows: In 2008, India passed a ground-breaking law to introduce the Limited Liability Partnership form into Indian business law. The Indian LLP Act was the first major introduction of a new business form in India in over 50 years. While the partnership and corporate forms (i.e. companies under...
Revised FDI Norms for Construction Notified
Last month, we had carried a guest
post summarising and commenting upon the changes to the FDI norms in the
construction industry, which relaxed several conditions. Now the Department of
Industrial Policy and Promotion (DIPP) has made these changes effective in the
form of Press
Note No. 10 (2014 Series).
Proposed Amendments to the Companies Act, 2013
It has been just a year since certain provisions of the Companies Act, 2013 (the 2013 Act) were brought into force, and the Government has already yielded to pressure from industry to address some concerns within the legislation. The Union Cabinet has approved the introduction of the Companies (Amendment) Bill, 2014 in Parliament. At the time of this writing, only a press release of the...
SEBI’s Proposal for a Dividend Policy
Last week, media reports indicated that SEBI is considering imposing a requirement on listed companies to come out with a dividend policy that will compel (or at least nudge) profitable cash-rich companies to distribute their profits to shareholders. The introduction of more stringent requirements on companies to state their dividend policies will introduce a great deal of transparency on this...
SEBI Reforms – Part 3: From Listing Agreement to Listing Regulations
In most jurisdictions, several aspects of corporate governance and disclosures for listed companies are regulated through stock exchange listing requirements. These apply only to listed companies, and they are enforced by the stock exchanges. Operating as conditions to continuous listing, one of the enforcement mechanisms used is the threat (sometimes carried out) of delisting the securities...
Tighter Restrictions on Offshore Derivative Instruments
The issue of offshore derivative instruments (ODIs) such as participatory notes (PNs) have been the subject matter of regulatory controversy for some time now. These are instruments issued by foreign institutional investors (FIIs) (now foreign portfolio investors (FPIs)) to investors overseas that mimic the risks and rewards on underlying securities held by the FIIs/FPIs in Indian companies...
Revival of Sick Units Takes Precedence Over Loan Recovery
[The following post is contributed by Prachi Narayan of Vinod Kothari & Company. She can be contacted at [email protected]] The Supreme Court in its judgment in the case of KSL Industries Ltd vs. Arihant Threads Ltd on October 27, 2014 finally settled the position of law over the vexed issue of precedence of two special enactments, the Sick Industrial Companies (Special Provisions)...
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