[The following post is contributed by Vaneesa Abhishek, who is a securities lawyer and a former Legal Officer of the Securities and Exchange Board of India (SEBI)] Background The Securities Laws Amendment Act, 2014 (“2014 Act“) was notified recently. Section 1(4) of the 2014 Act provides that certain provisions that relate to minimum penalty under adjudication chapters of the...
SEBI’s Revisions to Corporate Governance Norms
In April this year, SEBI had announced a revamped clause 49 of the listing agreement specifying the revised corporate governance norms to come into effect from October 1, 2014. This was to bring the SEBI norms in line with the Companies Act, 2013 (2013 Act). However, in certain material respects, the new clause 49 differed from the provisions of the 2013 Act, in that clause 49 imposed a more...
Is levy of penalty mandatory and inevitable? – mindless/rote application of Supreme Court decision in Shriram?
(Note:- This article is my latest contribution to my monthly column on Securities Laws in Bombay Chartered Accountants’ Journal) Penalty is mandatory because Supreme Court says so, SEBI consistently and incorrectly holds Almost each and every SEBI order levying penalty relies on a Supreme Court decision in Shriram’s case (SEBI vs. Shri Ram Mutual Fund (2006) 68 SCL 216). The reliance is...
“Deposits” existing on 31st March 2014 – how to be treated under new Companies Act/Rules?
Since notification of the Companies Act, 2013 and Rules thereunder, certain transitional issues relating to “deposits” are causing concerns to numerous companies, big and small, listed and unlisted, public or private. They arise from the substantially modified definition of the term “deposits”. Many items of loans and other receipts that were not “deposits” earlier being now treated as deposits...
SAT Order on “Flash Crash”
A few days ago, the Securities Appellate Tribunal (SAT) passed its order on an appeal by Emkay Global Financial Services Limited against the National Stock Exchange (NSE) and several investors in a case involving a “flash crash”. This case raises interesting legal and contractual issues, although they were substantially resolved through an interpretation of the bye laws and various circulars...
The Securities Laws (Amendment) Act, 2014 – A Critical Analysis
[The following guest post is contributed by Mubashshir Sarshar, who is a lawyer and an alumnus of National Law University Delhi. The author can be reached at [email protected].] Two standalone incidents within a span of one year have managed to change the entire paradigm of the securities market transactions in India. The Sahara and Saradha episodes symbolised the stark loopholes that...
Guest Post: Guarantee Against Loan from Banks and Financial Institutions
[The following post is contributed by Abhishek Bansal and Stuti Bansal, Corporate Professionals, Advisors & Advocates. The authors can be reached at [email protected] and [email protected] respectively] Recently, India saw the enactment of the Companies Act, 2013 (“Act”), replacing the Companies Act, 1956, which governed the incorporation, functioning, transactions and other activities of...
Guest Post: Company Law Settlement Scheme – 2014
[The following guest post is contributed by Abhishek Dubey, who is a Senior Associate with BMR Legal. Prior to joining BMR Legal, Abhishek has worked with Amarchand & Mangaldas & Suresh A. Shroff & Co. and P&A Law Offices.] Introduction The Ministry of Corporate Affairs has introduced a scheme for companies who have defaulted in making annual statutory filings with the Registrar...
Guest Post: CCI Order on Car Manufacturers for Anti-Competitive Conduct
[The following guest post is contributed by Ann Minu Jose, a lawyer working with the Competition Commission of India. Views expressed are personal. The CCI Order discussed is available here] Facts: Information was filed under Section 19(1)(a) of the Competition Act, 2002 (“Act”) initially against 3 car manufacturers[1] alleging anti-competitive practices on part of the opposite parties...
Oppression/Mismanagement and Arbitration Clauses
We had earlier briefly noted the decision of the learned Single Judge of the Bombay High Court in Malhotra v. Malhotra, where it was held that disputes in a petition properly brought under sections 397-398 of the Companies Act are not capable of being arbitrated. In essence, the learned Single Judge held that considering the nature and source of the oppression/mismanagement remedies and the scope...
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