Blog Posts
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Paving the Way for Short Selling in the Indian Market
[Posted by Umakanth Varottil] Background At the outset, it may be useful to provide a brief background on the concept of short selling and its related jargon in very simple (and non-financially savvy) terms. Short selling is a sale of shares by a person without actually owning those shares. What occurs is that the seller…
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Miscellaneous: Bangladesh Investments, IDRs, Goa SEZs
[Posted by Umakanth Varottil] 1. Investments from Bangladesh eased The Economic Times reports that Bangladeshi investors are now allowed to Indian companies, albeit with the approval of the Foreign Investment Promotion Board (and not under the automatic route). This removes a previous embargo on such investments. The report states: “India has opened its door for…
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Simplifying Corporate Bond Issuances
[Posted by Umakanth Varottil] Continuing with the spate of regulatory announcements by SEBI over the turn of the new year, it yesterday issued a press release proposing simplification of the primary issuance process for corporate bonds. It has released a consultative paper on the “Draft SEBI (Issue and Listing of Debt Securities) Regulations, 2008” for…
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Indian Acquisitions in the US: A Quick Checklist of Issues
[Posted by Umakanth Varottil] The Harvard Law School Corporate Governance Blog carries a recent post that contains a handy checklist of critical current issues that should be considered in advance of any acquisition of US businesses by non-US entities. The checklist has been prepared and posted by Wachtell, Lipton, Rosen & Katz, the top US…
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PSUs and Corporate Governance
[Posted by Umakanth Varottil] In a continuation of the debate between SEBI and the public sector undertakings (PSUs) over whether the latter should comply with the provisions of Clause 49 of the listing agreement regarding corporate governance, the SEBI Chairman, Mr. Damodaran has categorically stated that there will be no relaxation for PSUs from the…
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Now, Kidnapping Insurance
[Posted by Umakanth Varottil] Today’s Business Times, Singapore (page requires subscription) carries an interesting story that companies in India are taking out kidnapping insurance for their top employees located in high-growth hubs such as Hyderabad, Bangalore and Delhi suburbs Gurgaon and Noida. As for the nature of the policies taken, the newspaper reports: “The kidnapping-terror…
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Participatory Notes: Regulating Complex Financial Instruments
[Posted by Umakanth Varottil] Today’s Mint carries a column by Niranjan Rajadhyaksha that deals with the issues relating to regulation of complex financial instruments such as participatory notes that are held by investors like hedge funds. Referring to the classic debate between public regulation and market regulation, he states: “Regulators have two options: to demand…
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Insider Trading and Short Swing Profits
[Posted by Umakanth Varottil] SEBI yesterday issued a Consultative Paper on introduction of ‘Short Swing Profit’ regulations in India. Under this proposal, any insider would be compelled to surrender profits to the company that are derived from a transaction involving the purchase and sale of securities by the insider within a period of six months.…
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REITs on the Anvil
[Posted by Umakanth Varottil] Real estate investment trusts (REITs) are similar to mutual funds. However, unlike mutual funds that usually hold securities, the underlying assets held by REITs are constituted by real estate properties. Investors in REITs can participate in returns from these real estate investments. The last couple of years have seen a boom…
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Promoters’ Contribution; SEBI Ruling in the Reliance Power Case
[Posted by Umakanth Varottil] In its order passed yesterday, the Securities and Exchange Board of India (SEBI) ruled that shares acquired by the promoters of Reliance Power Limited (RPL) pursuant to a scheme of amalgamation approved by the High Court of Bombay would be eligible for computation of promoters’ contribution under the SEBI (Disclosure and…