Blog Posts
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Supreme Court on Winding-up Petition by a Contributory
[Posted by Umakanth Varottil] Usually, in a merger, the resulting company becomes entitled to all the rights (and subject to all the liabilities) of the merging company. This includes the exercise of rights in respect of shares in other companies (which we shall call target companies) held by the merging company, as the resulting company…
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Reforms in the IPO Process
[Posted by Umakanth Varottil] Payment Mechanism Although there were reports about this in the recent past, SEBI yesterday formally notified reforms in relation to the payment process for resident retail investors in IPOs. Under this process, these retail investors do not have to make any payment when they bid for shares in the bookbuilding process,…
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India’s New Competition Law: A Comparative Assessment
[Posted by Umakanth Varottil] Antitrust & Competition Policy Blog points to a new article by Delhi School of Economics Professor Aditya Bhattacharjea on India’s New Competition Law: A Comparative Assessment in the Oxford Journal of Competition Law and Economics. The abstract is set out below: This paper critically examines India’s new Competition Act. I begin…
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Promoters’ Contribution: SAT Ruling in the Reliance Power Case
[Posted by Umakanth Varottil] A few days ago, the Securities Appellate Tribunal (SAT) passed its order in the Reliance Power IPO Case. This is on an appeal from the decision of SEBI (that we had posted about earlier on this blog). I thank one of our readers who sent in a review of the SAT…
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Warrants to Foreign Investors
[Posted by Umakanth Varottil] The Economic Times reports that there is a proposal within the Government to bring the issue of warrants by Indian companies to foreign investors within the automatic route where foreign direct investment is otherwise permitted under the automatic route. This move, if crystallized through a formal policy pronouncement, will dispel some…
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Liquidation Preference: How Effective is it?
[Posted by Umakanth Varottil] In a column in the Economic Times, Amrita Singh and Siddharth Shah discuss the relevance of the concept of liquidation preference in Indian investment transactions: “The progressive liberalisation of the foreign investment regime has provided a major boost to private equity and venture capital investments in Indian companies. With the advent…
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Share Buyback: The Effect of Shareholders’ Resolution
[Posted by Umakanth Varottil] In a recent case decided last week, the Securities Appellate Tribunal (SAT) had the occasion to decide on the effect of a shareholders’ resolution in the context of a buyback of shares. The SAT decision is available here. The facts of the case are fairly straightforward. The company involved, D-Link India…
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Press Note 1: Changes Expected
[Posted by Umakanth Varottil] Press Note 1 of 2005 issued by the Department of Industrial Policy & Promotion (DIPP) requires foreign companies to obtain the prior permission of the Foreign Investment Promotion Board (and thereby making the automatic route for investment ineligible) if they had a joint venture with another Indian partner in the same…
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Recent Restrictions on Short Selling in the US: Comparing the Indian Position
[Posted by Umakanth Varottil] The steep fall in prices of several US investment banks and financial institutions, such as Bear Stearns, Fannie Mae and Freddie Mac have been attributed to false rumours leading to panic selling, which has been further exacerbated by “naked” short selling. This has necessitated emergency action on the part of the…
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The Efficacy of Windfall Profits Tax
[Posted by Umakanth Varottil] In an earlier post, we had discussed how the recent spike in oil prices has raised important issues relating to corporate governance in listed public sector companies. Now, this steep oil price rise has rekindled the debate on the need to impose a windfall profits tax on private oil companies. The…