Blog Posts
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Cooperatives and Producer Companies
[Posted by Umakanth Varottil] In this Mint column, Narayan Ramachandran calls for a shift in attention from the classic corporate model of limited liability companies to a cooperative model that involves “a voluntary agreement to share, for the mutual benefit of all parties”. Although India is no stranger to the cooperative model (as the author…
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Service Tax on Software Upheld
[Posted by V. Niranjan] In 2005, the Supreme Court held that the transfer of branded software constitutes a sale and is exigible to sales tax, levied by State Governments under Entry 54, Schedule VII of the Constitution (Tata Consultancy Services v. State of AP). I have argued elsewhere that this decision may, with respect, require…
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Extending Securities Regulation to the Fourth Estate
[Posted by Umakanth Varottil] A free and active press generally provides impetus for instilling enhanced corporate governance practices in any economy, as it does in India. However, conflicts of interest that the media faces may create distorted incentives that dilute these objectives. One such conflict is presented by the concept of “private treaties” whereby media…
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New Framework for Foreign Investment Proposed
[Posted by Umakanth Varottil] The Ministry of Finance recently published on its website a report of the Working Group on Foreign Investment in India. The report seeks to address the complexity and overlaps in the existing regime on foreign investment in India and to propose a more streamlined framework. It focuses largely on foreign portfolio…
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Direct Taxes Code Bill, 2010 versus Income Tax Act, 1961: A Comparison of Certain Aspects
[Posted by Mihir Naniwadekar] As noted in an earlier post, the Direct Taxes Code Bill has been introduced in Parliament. If enacted, it will come into force from 2012. Below is a comparative chart discussing the differences in the provisions in the current Act and in the Code Bill. The changes below are not…
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Andhra Pradesh High Court on Reduction of Capital: More Uncertainty?
[Posted by Mihir Naniwadekar] In an earlier post, I had highlighted some observations of the Bombay High Court in Re Organon, and had commented on whether the decision of the Single Judge in that case stood easily along with the observations of a Division Bench in Sandvik. The decision in Sandvik can perhaps be read…
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Fraud and the amendment of a section 34 application
[Posted by Shantanu Naravane] In an important fallout of the Satyam controversy, the Supreme Court, earlier this month, reiterated the law on the amendment of section 34 applications, and also clarified the kinds of fraud that would justify the setting aside of arbitral awards on grounds of public policy. After the fraud perpetrated Mr. Raju,…
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Direct Taxes Code Bill, 2010
[Posted by Mihir Naniwadekar] The Direct Taxes Code Bill, 2010 was introduced in Parliament earlier today. A copy of the Bill can be downloaded from here. Over the next few days, we will discuss some of the provisions of the Bill in greater detail. For now, some news reports on the DTC are linked below: Corporate…
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Nomination of Directors by Shareholders
[Posted by Umakanth Varottil] Earlier this week, the U.S. Securities and Exchange Commission (SEC) adopted the much anticipated proxy access rule which allows shareholders to nominate candidates for directorship. The essence of the new rules is as follows: The new rules require companies to include the nominees of significant, long-term shareholders in their proxy materials,…
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SEBI’s Domain Over Auditors of Listed Companies
[Posted by Umakanth Varottil] Earlier this month, the Bombay High Court issued its judgment in the case of Price Waterhouse & Co. v. Securities and Exchange Board of India. The court ruled that SEBI possesses necessary powers to initiate investigations against an auditor of a listed company for alleged wrongdoing. Facts: A writ petition was…