Delisting of securities tends to be somewhat controversial given that it represents the tension between the interests of the controlling shareholder who want to delist the company and the interests of minority shareholders who are caught between the options of exiting the company at the offered value or remaining in the company without the liquidity and protections that a stock exchange listing...
SEBI Reforms – Part 1: Insider Trading
Yesterday, SEBI’s board unleashed a series of capital market reforms. These relate to insider trading, delisting, enforceability of the listing agreement and several other matters. In this post, I briefly examine the implications of the reforms on regulations pertaining to insider trading. The SEBI board has approved a new set of regulations dealing with insider trading. While the text of the...
Delaware Court Ruling on Deal Conditions in the Apollo-Cooper Merger
A recent Delaware court ruling deals with matters involving the “unraveling of the Agreement and Plan of Merger (the “Merger Agreement”) by which a large Indian tire manunfacturer—[Apollo]—was to buy a large American tire company—Cooper Tire & Rubber Company (“Cooper”).” Billed as among the largest overseas acquisitions by an Indian company, Apollo was to acquire all the shares of Cooper...
Indian Companies Issuing Securities Overseas
Historically, Indian companies have issued equity instruments in the form of depository receipts (either American depository receipts (ADRs) or global depository receipts (GDRs)) or convertible debt instruments in the form of foreign currency convertible bonds (FCCBs). Of late, such overseas securities issuances have reduced quite significantly. Now, the Government has revamped the legal regime...
SEBI Informal Guidance: Scope of Prohibition
[The following post is contributed by Supreme Waskar, partner at Sterling Associates, Mumbai] Almondz Global Securities Limited (“AGSL”) is a stock broker and merchant banker registered with SEBI. On March 21, 2014 SEBI had prohibited AGSL from taking up any new assignment or involvement in any new issue of capital including an IPO, follow on issue etc, from the securities market in any manner...
Financial Year Status of Foreign Owned and Controlled Companies
[The following post is contributed by Esha Chakraborty of Vinod Kothari & Co. She can be contacted at [email protected]] The financial year (F.Y.) 2014-15 seems overwhelming for India Inc. as it faces the daunting task of meeting regulatory time-lines on the implementation of several new provisions introduced under the Companies Act, 2013 (the ‘Act, 2013’). The requirement of ‘Uniform...
Update: Relaxation of FDI Norms for Construction Development Sector
[The following post is contributed by Bhushan Shah at Mansukhlal Hiralal & Company, Mumbai] The Union Cabinet on 29 October 2014 decided to amend the Foreign Direct Investment (FDI) policy in the construction sector, i.e. townships, housing and built-up infrastructure. The press release is available here. The key amendments are as follows: Minimum area to be developed: (a) The minimum built...
Disclosure of “Encumbrances” on Shares
Recently, the Securities Appellate Tribunal (SAT) had to deal with two separate situations pertaining to the disclosure of pledge or other encumbrance over shares. In an order discussed earlier today, the SAT found that the acquisition of shares by a public financial institution through the invocation of a pledge was required to be disclosed in accordance with SEBI’s Takeover Regulations...
Invocation of pledge by PFI requires disclosure under SEBI regulations
[The following post is contributed by Supreme Waskar, partner at Sterling Associates, Mumbai] The Securities Appellate Tribunal (SAT) has upheld the order of SEBI against SICOM Ltd. (“SICOM”) imposing penalty of Rs. 5 lakhs for non-disclosure of acquisition pursuant to the invocation of a pledge under regulations 29(1) and 29(2) of the Securities and Exchange Board of India (Substantial...
Doing Business Report 2015: A Mixed Bag for India
The World Bank has released its report titled “Doing Business 2015: Going Beyond Efficiency”. It has also published a country report on India for the same year. At the overall level, India does not emerge in positive light, given that its ranking has fallen to 142 (out of a total of 189 countries) from 140 in last year’s rankings. India does not rank favourably among comparator economies either –...
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