Blog Posts
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Accounting for Derivatives Exposure
[Posted by Umakanth Varottil] A recent announcement by the Institute of Chartered Accounts of India (ICAI) has added to the imbroglio over derivatives. Accounting Standard 30 (AS30) that deals with accounting for derivatives was to become mandatory with effect from April 1, 2011. However, the ICAI in an emergent decision has called for an early…
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Improving Stock Sales Practices of Intermediaries
[Posted by Umakanth Varottil] Stock intermediaries around the world, such as brokers and sub-brokers, who recommend and sell securities to clients, are regulated by the securities regulatory agencies of the countries where they operate as well as the stock exchanges of which they are members. However, the stock intermediation industry has been facing several problems…
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Inadequacies of the FII Regime
[Posted by Umakanth Varottil] One of our guest contributors, Somasekhar Sundaresan, has a well-argued column in the Business Standard in which he calls for an overhaul of the regulations that govern foreign institutional investors (FIIs) in India. Here it is: The regulatory regime for foreign institutional investors (FIIs) is the Indian capital market’s window to…
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Tata-JLR Acquisition: The Legal Team
[Posted by Umakanth Varottil] Legal Week has a news report on the law firms that advised on the transaction. They are Hogan & Hartson (for Ford), Herbert Smith (for Tatas) and Allen & Overy (for the consortium of banks). The report, however, does not mention about the involvement of any law firms on the Indian…
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Fairness Opinions: Art or Science?
[Posted by Umakanth Varottil] It has been said that valuation of a company is more of an art than a science. This has manifested again in the Bear Stearns transaction that is currently hogging limelight among legal circles. In this case, Lazard issued a fairness opinion when JP Morgan’s transaction with Bear Stearns was first…
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Price Manipulation in Stocks: Evidentiary Problems
[Posted by Umakanth Varottil] SEBI last week passed an order in relation to an investigation involving the promoters of Zee Telefilms Limited. This was under the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 1995 (the SEBI (PFUTP) Regulations). SEBI alleged that the promoters of Zee Telefilms Limited (now Zee…
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Pay Commission Recommendation for Regulatory Bodies Laudable
[Posted by Somasekhar Sundaresan] The Sixth Pay Commission Report has hogged headlines. An interesting and important recommendation that will help the administration of corporate law is the recommendation on payscales for full-time members of regulatory bodies set up under Acts of the Parliament of India. The Commission has recommended that Chairmen of bodies such as…
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Bear Stearns: Some Legal Complications
[Posted by Umakanth Varottil] JP Morgan Chase yesterday increased its bid for Bear Stearns to $10 per share from its previous bid of $2, fearing a refusal by shareholders to approve its takeover of the beleaguered broking entity. Several large shareholders of Bear Stearns had expressed disappointment at the initial offer price put out by…
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Special Purpose Acquisition Companies: On the Rise
[Posted by Umakanth Varottil] Special Purpose Acquisition Companies (SPACs) that are also known as “blank check companies” are gradually acquiring prominence in the Indian markets. It is worth briefly examining these entities and their advantages as well as the risks surrounding them. SPACs are essentially shell entities with no business operations, and which raise funds…