SEBI has passed perhaps the first adverse order on commodity trading after having acquired jurisdiction over this field from FMC. This order coincidentally comes almost exactly one year after this jurisdiction was proposed for it in Finance Bill 2015. The order is also curious as it specifically passes wider/dual bans debarring parties not only from commodity markets but in transactions of...
Political contributions by foreign owned companies to be permitted – and with retrospective effect
It was earlier posted here that a proposed amendment through the Finance Bill 2016 will permit certain CSR contributions by companies with majority foreign holdings. There is a further implication to this that also needs consideration. This amendment will also permit political contributions by such companies. The amendment is proposed to have retrospective effect from 26th September 2010. This...
Budget 2016 amends FCRA – paves way for CSR by FOCCs
[The following guest post is contributed by Aditi Jhunjhunwala, who is a partner at Vinod Kothari & Co, and can be reached at [email protected]]. Amongst the various amendments proposed in the Finance Bill, 2016, one such relates to changes to the provisions of the Foreign Contribution (Regulation) Act, 2010 (the Act/FCRA), which has come as a relief to foreign owned and controlled...
Delhi High Court on Directors’ Duties and Derivative Actions
It is not very often that we witness cases in India relating to intrinsic company law issues such as breaches of directors’ duties and shareholder remedies through derivative actions. However, questions of directors’ duties have been brought to the fore following the Companies Act, 2013 as they have been codified in the legislation. Derivative action, however, still remains within the realm of...
Indian REITs – Story So Far, Challenges and Expectations from Budget 2016
[This guest post is contributed by Yashesh Ashar and Swati Adukia. They are tax professionals and specialize in mergers and acquisition tax. Please note that the views are personal] I. Introduction The Securities and Exchange Board of India (“SEBI”) notified the SEBI (Real Estate Investment Trusts) Regulations, 2014 (“REIT Regulations”)...
Understanding the Exit Rights Provided by Private Companies
[The following guest post is contributed by Ananya Banerjee, a 5th Year Student of University of Calcutta, Department of Law] Investing in companies (especially in startups) involves a huge risk. For this reason, financial investors look for exit rights which allow them to exit the company with a high return on the investment amount. While the aim of the strategic investors is not to...
Case-Study Evidence of Shareholder Activism
We have previously highlighted the rise of shareholder activism in India (here and here). Activism has been aided by regulatory reforms that have enlarged shareholder participation. In addition, market changes have resulted in previously passive institutional investors becoming more active in recent times. They have further been supported by the emergence of a growing and vibrant proxy advisory...
Exit Offer to Dissenting Shareholders
[The following guest post is contributed by Yogesh Chande, who is a Partner at Shardul Amarchand Mangaldas, Advocates & Solicitors. Views of the author are personal. Yogesh can be reached at [email protected]] Subsequent to my guest post dated 30 March 2014 in connection with section 13(8) and section 27(2) of the Companies Act, 2013, SEBI issued a discussion paper on 1 December...
MDs/WTDs crossing 70 years of age mid-tenure lose their jobs
The Bombay High Court has held that Managing/Whole-time Directors (“EDs”) will lose their jobs if they cross 70 years of age during their tenure of appointment. This is the new position of law under Section 196(3)(a) of the Companies Act, 2013, which came into effect from 1st April 2014, and which was not so under the corresponding Section 267 of the Companies Act, 1956. (Note:- It was...
Approval of Trade Facilitation Agreement in India – A Brief Overview
[The following guest post is contributed by Ananya Banerjee, a 5th Year Student of University of Calcutta, Department of Law] In another effort to promote the ease of doing business in India and to create a more business friendly environment in India, the Union Cabinet has, on February 17, 2016, approved the proposal for notification of commitments under the Trade Facilitation Agreement...
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