In the past, rupee denominated bond issuances have essentially been available to multilateral institutions, of which the International Finance Corporation (IFC) had availed of them. Now, the Reserve Bank of India (RBI) has announced a draft framework, which allows Indian companies as well to tap this avenue for raising debt. Indian corporates that are eligible to avail of external commercial...
The Applicability of Minimum Alternate Tax to Foreign Investors
[The following guest post is contributed by Abhik Chakraborty, who is a 4th year student at NUJS, Kolkata] The Supreme Court in Ajanta Pharma Ltd. V. Commissioner of Income Tax-9, Mumbai [1] has clarified that the intent with which the provision related to minimum alternate tax (MAT)[2] was inserted in 1996 was to ensure that zero tax companies[3] pay at least a minimum amount of tax on their...
Lenders Empowered to Take Control over Distressed Firms
The Reserve Bank of India (RBI) yesterday conferred a significant power to banks to acquire control of borrower companies which fail to achieve prescribed milestones as part of their restructuring. Under this arrangement, the Joint Lenders’ Forum (or JLF, formed for the purpose of addressing distressed assets) may “convert the whole or part of the loan and interest outstanding into equity shares...
Whether Land is a “Security” Under Collective Investment Schemes
[The following guest post is contributed by Prachi Pandya, who is the founding member of Corporate Attorneys and can be contacted at [email protected]] It is a matter of interest that the trigger point of framing the SEBI (Collective Investment Schemes) Regulations, 1999 (the “CIS Regulations”) was owing to initiatives by private entrepreneurs undertaking plantation or agricultural...
Finally, Some Exemptions to Private Companies
[The following guest post is contributed by Vinod Kothari and Aditi Jhunjhunwala of Vinod Kothari & Co. The authors may be contacted at [email protected] and [email protected] respectively.] The 9-lakh (0.9 million) odd private companies in India have already been subjected to unprecedented compliances required under the Companies Act, 2013 (the “Act”) given the financial year-end...
Committee to Review the Companies Act
Although the Companies Act, 2013 is brand new and yet to be brought into force in its entirety, there is already a lot of discussion about the need to reevaluate the legislation. The Government has taken initial steps to address some of the issues by way of the Companies (Amendment) Act, 2015. However, as we have previously noted, the amendments are not very significant and are mostly procedural...
Liberalization of Investments by Non-Resident Indians
Non-resident Indians (NRIs) have long been considered as a separate category of investors who have enjoyed some privileges compared to other classes of foreign investors. NRIs have been allowed to investment either on a repatriable basis (with more stringent norms) and on a non-repatriable basis (with less stringent norms). Earlier this week, by way of Press Note No. 7 (2015 Series), the...
Dissecting SEBI’s Powers Under Section 11B of the SEBI Act, 1992: Part 3
[The following guest post is contributed by Kanwardeep Singh Kapany, and is a continuation of previous posts in Parts 1 and 2] Direction to disgorge does not amount to double jeopardy The expression disgorgement is a common term in developed markets across the world, though it is new to the securities market in India. The said expression connotes repayment of ill-gotten gains that is imposed on...
A Novel Exception to Privity of Contract?
(The following guest post is contributed by Shivprasad Swaminathan, who is Associate Professor at the Jindal Global Law School) The Delhi High Court’s judgment Utair Aviation v Jagson Airlines formulates a novel ‘conduct, acknowledgement and admission’ exception to privity of contract. This post argues that neither is the exception doctrinally warranted, nor its invocation in the case...
Dissecting SEBI’s Powers Under Section 11B of the SEBI Act, 1992: Part 2
[The following guest post is contributed by Kanwardeep Singh Kapany, and is a continuation of a previous post in Part 1] Retrospective application Section 11B was introduced to the statute through the 1995 Amendments with effect from January 25, 1995. In a certain case before the Supreme Court of India,[1] the misconduct had taken place in the months of October and November 1993. When directions...
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