[The following post is contributed by Vinod Kothari and Shampita Das of Vinod Kothari & Company. They can be contacted respectively at [email protected] and [email protected]] The latest setback from the MCA has come by way of the amendments to the Companies (Meetings of Board and its Powers) Rules, 2014 (MBP Rules) vide its notification dated 14th August, 2014, which is yet to...
Improving the Ease of Doing Business in India
We have been seeking to track India’s performance in World Bank’s Doing Business rankings for the last few years (with the last one available here). India has not made much progress in recent years on the overall scores, except on a few specific parameters. This has also become a cause of concern for foreign investors. The Government has now taken cognisance of these issues and the Department of...
Paper on Squeeze Outs in India
Professor Vikramaditya Khanna and I have co-authored a working paper titled “Regulating Squeeze Outs in India: A Comparative Perspective” that is now available on SSRN. The abstract is as follows: Squeeze outs are both visible and palpable manifestations of a controlling shareholder’s raw power within the corporate machinery – the ability to openly force minority shareholders to exit the company...
Guest Post: Corporate Law Reforms and Whistleblowing
[The following post is contributed by Suprotik Das, a 3rd year law student at the Jindal Global Law School, Sonepat, Haryana] Last year, with the advent of the Companies Act, 2013 (the Act), the thrust has been toward fraud protection and having an effective corporate vigil mechanism. Companies in India are now required to have an appropriate whistle blower protection policy in place. In this...
SAT on Withdrawal of a Takeover Offer
Once an acquirer makes an open offer under the SEBI Takeover Regulations, it has to meet a high standard (somewhat similar to frustration) before it is allowed to withdraw such an offer. This principle has been laid down by the Supreme Court in two cases, i.e. Nirma Industries/ Shree Rama Multi Tech and Akshya Infrastructure/ MARG, which we have previously discussed on this Blog. Readers may...
Reverse Break Fees on Indian Transactions
Background; Concept Internationally, in negotiated mergers & acquisitions (M&A) transactions, it is customary to incorporate various types of deal protection devices in order to guard against a scenario where the deal falls through before it is completed and parties have in the meanwhile invested significant time and incurred costs. Two such deal protection devices that operate almost...
Squeeze Outs: Analyzing the Cadbury Decision
[Professor Vikramaditya Khanna and I have co-authored the following post] Background In India, several transaction structures are available for controlling shareholders to squeeze out minority shareholders. These include the compulsory acquisition mechanism, scheme of arrangement and reduction of capital. Out of these, the most commonly used method is the reduction of capital. That is not at all...
Paper on Corporate Insolvency Laws in India
Professor Kristin van Zwieten has posted on SSRN a new paper titled “Corporate Rescue in India: The Influence of the Courts”, the abstract of which is as follows: India is poised for significant reform to its corporate insolvency laws, including the introduction of a new rescue procedure. The reforms follow two decades of sustained criticism of the law, critics complaining of lengthy delays and a...
Guest Post: Removal of Directors – The Necessary Numbers
[The author is an Advocate at the Bombay High Court, and can be contacted at [email protected]] Under the Companies Act, 1956 (“1956 Act”), it was settled law that a resolution proposing the removal of a director before expiry of his period of office under s. 284 of the 1956 Act would have to satisfy the numerical requirements prescribed by s. 188 of the 1956 Act (see for example, )...
Guest Post: Critical Analysis of Securities Laws (Amendments) Bill, 2014
[The author is a practicing lawyer in Mumbai. Email: [email protected]] This post is on a slew of legislative changes in Securities Laws through three ordinances and more particularly, Securities Laws (Amendment) Ordinance, 2014 (“2014 Ordinance”) which has been passed by the Lok Sabha as Securities Laws (Amendment) Bill, 2014 (“2014 Bill”). Three ordinances were...
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