Blog Posts
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Indian stock markets
[Posted by Gauri Manglik] I just came across an interesting article in MoneyLife, where Debashis Basu traces the ups and downs of the Indian stock markets – He states that during the boom in 1994-95, there were 1400 IPOs in a year! That sounds absolutely unbelievable now – considering 2007 was the big hit year…
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Governance Trends Among Indian Conglomerates
[Posted by Umakanth Varottil] In a column in the Financial Express, Rajesh Chakrabarti sets out some observations regarding corporate governance trends that are affecting Indian companies (particularly conglomerates), based on academic research. These include concentrated ownership (even among large listed companies), lower than desired levels of board supervision, earnings management and the skewed nature of…
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Endemic Delays with Takeover Offers
[Posted by Somasekhar Sundaresan] The Hindu Business Line has published an interesting news story in its edition dated August 24, 2008 about delays in clearing open offers made under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (“Takeover Regulations”). Chronic delays in clearance of open offers are leading to M&A activity in India…
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Legal Practices and Public Ownership
[Posted by Umakanth Varottil] We have previously discussed on this blog (here and here) the phenomenon whereby law firms could undertake transactions such as public offering of securities and buyouts. The current issue of The Economist carries a column on this topic. Here is an extract: “Investing in law firms is more than just a…
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The Impact of Status Quo on Participatory Notes
[Posted by Umakanth Varottil] Last week, there was expectation that SEBI would make some announcements regarding issuance of participatory notes (P-notes) by foreign institutional investors, particularly that curbs on P-notes will be removed. However, no decision was taken by SEBI and it was decided to defer the matter. In an editorial, the Financial Express comes…
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Reverse Burden upon Exporters under FERA
[Posted by Umakanth Varottil] (The following post has been contributed by Venugopal Mahapatra and Gautam Bhatia) A recent judgment of the Supreme Court addressed a few important questions with regard to the imposition of reverse burden under the Foreign Exchange Regulation Act (FERA). In the case of Seema Silk and Sarees and Anr. v. Directorate…
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Revisiting the Foreign Venture Capital Regime
[Posted by Umakanth Varottil] In a previous post on this blog about four months ago, we had extolled the virtues of an economy possessing a favourable venture capital regime. We had also highlighted some of the progressive developments in the Indian venture capital market that were induced by favourable regulations issued by SEBI and RBI.…
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Simplifying Qualified Institutional Placements and Rights Issues
[Posted by Umakanth Varottil] (In the following post, Shantanu Naravane examines recent changes to the SEBI DIP Guidelines made with a view to promoting qualified institutional placements and rights issues) The concept of Qualified Institutional Placements [“QIP”] was introduced in India, with effect from May 8, 2006, by virtue of an amendment to the SEBI…
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Official Liquidator and Misfeasance Proceedings
[Posted by Umakanth Varottil] (The following post has been contributed by V. Niranjan) Under s. 457 of the Companies Act, a liquidator has wide powers to ensure fair and equitable distribution of its assets. These powers are general in nature, and their scope and extent are well known. In addition, the Official Liquidator also has…
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Inconsistency in Accounting Norms
[Posted by Umakanth Varottil] There have been news reports lately that bring to the fore the inconsistency between the accounting standards issued by the Institute of Chartered Accountants of India (ICAI) and the requirements in Schedule VI of the Companies Act, 1956 in relation to exchange losses incurred by companies on foreign currency-denominated transactions (see…