[The following post is contributed by Nidhi Bothra of Vinod Kothari & Company. The author may be contacted at [email protected]] The financial crisis of 2007-08 led to several failed securitization transactions and brought in a storm of litigation in structured products.[1] Post the crisis, several bondholders sued the originators alleging misrepresentations on the quality of loans...
Guest Post: Nachiket Mor Committee Recommends Bank – NBFC Convergence
[This post has been contributed by Shampita Das of Vinod Kothari & Company. The author may be contacted at [email protected]] The Reserve Bank of India (RBI) in September, 2013 had set up a ‘Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households’, under the Chairmanship of Dr. Nachiket Mor, Member on RBI’s Central Board of Directors. The main...
Takeover and Compliance with Minimum Public Shareholding
A recent informal guidance issued by the Securities and Exchange Board of India deals with the questions pertaining to the intersection of the SEBI Takeover Regulations of 2011 and the process of complying with the minimum public shareholding in listed companies. In the case involving R Systems International Limited, the acquirer made an open offer and acquired certain shares of the target...
Miscellaneous
1. RBI Circular on Options We had carried two guest posts (here and here) on RBI’s notification dated 9 January 2014 relating to options and convertible instruments. This notification has generated a great deal of debate and its precise scope and contours are still being carefully ascertained. For a flavour of the further debate, the following...
CBCL E-Journal (Issue IV): Call for Papers
[This is an announcement from the Centre for Business and Commercial Laws (CBCL), National Law Institute, Bhopal] Centre for Business and Commercial Laws (CBCL), National Law Institute, Bhopal is pleased to invite submissions for the fourth issue of the Centre for Business and Commercial Law e-Journal. It’s a student run, faculty regulated, peer reviewed law journal that is published annually...
Representations & Warranties: Limitation Period
The documentation package containing representations and warranties, covenants and indemnities are quite common in corporate transactions involving Indian companies, particularly those pertaining to acquisitions, investments and corporate finance. However, despite their popularity, they have not been the subject matter of judicial consideration so as to provide some guidance as to how they may be...
Guest Post: Optionality Clauses Permissible in FDI Instruments – the Heydays for Exit Rights
[This post is contributed by Nidhi Bothra of Vinod Kothari & Co. She can be contacted at [email protected]. This is a continuation of a previous post on this topic, and supplements the analysis in that post.] The optionality clause in equity shares/ compulsory convertible debentures/ preference shares has been a gray area from the regulatory perspective in India for years. These...
FDI in Pharma; Non-Compete
According to the prevailing annual FDI policy notified by the Government in April 2013, foreign direct investment (FDI) in the pharmaceuticals sector is allowed up to 100%. While FDI is allowed in greenfield projects under the automatic route, FDI in brownfield projects requires prior Government permission. Given the numerous acquisitions of Indian pharma players by multinational companies in...
Guest Post: RBI Circular on ‘Options’
[The following post is contributed by Parag Bhide, who is a Principal Associate at Universal Legal, Mumbai] Finally, Foreign Investors investing into India are able to include ‘options’ in their investment agreements. The Reserve Bank of India (“RBI”), through its circular dated 9 January 2013 (“Circular”) has legitimized inclusion of options/right to exit in the Investment Agreements.[1]...
Private Subsidiary of a Foreign Company: Status and Consequences
Since the enactment of the Companies Act, 2013 (the “2013 Act”), several issues relating to its interpretation have been coming up for consideration. One such issue relates to the status of a private company in India that is the subsidiary of a foreign company (being a public company). The specific question relates to whether the Indian private company can continue with its status or whether that...
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