Earlier this month, the Delaware Chancery Court ruled on the extent to which a director of a company can seek to obtain information from the company in order to discharge applicable duties. In Kalisman v. Friedman, the court was concerned whether Jason Kalisman, a director of Morgans Hotel Group Co., was entitled to certain information regarding the company. Kalisman was a representative of OTK...
Takeover Exemption: Inter Se Transfer Among Promoters
A few months ago, we had discussed certain orders passed by SEBI that exempted parties from mandatory open offers in certain specific circumstances. Recently, SEBI passed an exemption order in a transfer involving the shares of GMR Infrastructure Limited (the target company). In this case, 70.3% of the shares of the target company are held by GMR Holdings Private Limited (GHPL). GHPL is in turn...
Another Round of FDI Reforms
The Government seems to be facing a somewhat similar situation that it faced way back in 1991 when it launched big bang reforms for liberalization of the Indian economy. With slowing growth rates and a sliding Rupee, the Government seems compelled to take immediate measures. One such set of measures relates to reforms that help attract greater flow of foreign direct investment (FDI) into the...
Committee Report on Foreign Portfolio Investments
In mid-June, SEBI had announced the submission of a report by the Committee on Rationalization of Investment Routes and Monitoring of Foreign Portfolio Investments under the chairmanship of Mr. K.M. Chandrasekhar. The full report in now available online. The key recommendations of the committee are to combine the erstwhile portfolio investment categories of foreign institutional investors (FIIs)...
RBI Guidelines on Private Placement of Debentures by NBFCs – Part 2
[The following post is contributed by Nidhi Ladha and Vinita Nair of Vinod Kothari & Co. They can be contacted at nidhiladha@vinodkothari.com and vinita@vinodkothari.com respectively. This is a continuation of a previous post accessible here] RBI Directions The present Guidelines From June 27, 2013 onwards, any issue of debentures- whether convertible or non convertible, by NBFCs – whether...
RBI Guidelines on Private Placement of Debentures by NBFCs – Part 1
[The following post is contributed by Nidhi Ladha and Vinita Nair of Vinod Kothari & Co. They can be contacted at nidhiladha@vinodkothari.com and vinita@vinodkothari.com respectively] Non Banking Financial Companies (NBFCs) raise money through the issuance of capital/debt securities (including debentures) by way of public issue or private placement. Lately...
SAT Order on Minimum Public Shareholding Norms
The Securities Appellate Tribunal issued its order in the case involving compliance of the public shareholding norms in Gillette India Limited. Gillette had filed an appeal against an order of the Securities and Exchange Board of India (SEBI) rejecting Gilette’s proposal for compliance with the public shareholding norms. However, SAT dismissed Gillette’s appeal in an order that extensively...
Interpreting Reps and Warranties in M&A Deals
Although clauses such as representations and warranties have become quite ubiquitous in M&A transactions involving sale and purchase of assets, business or shares, there has hardly been any litigation in India involving the technicalities of such representations and warranties. The reps and warranties also constitute some of the major sticking points in negotiations that take up a substantial...
SEBI gives preference shares a new direction – issues regulations for non-convertible preference shares
[The following post is contributed by Nivedita Shankar of Vinod Kothari & Co. She can be contacted at nivedita@vinodkothari.com] In continuation to its press note PR No. 27/2013[1], the market regulator Securities Exchange Board of India (“SEBI”) has notified the SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013[2] (“Regulations, 2013”) on June 12...
Competition Act: Status of Director General’s Finding
[The following post is contributed by Akanksha Mehta, a student of Dr. R.M.L. National Law University, Lucknow, who has an interest in competition law] One of the major loopholes in the present Competition Act, 2002 seems to have found some judicial clarification through COMPAT’s (Competition Appellate Tribunal) order dated 18th April, 2013. Section 26 of the Act includes all the orders that the...
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