Blog Posts
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Regulation of Stock Exchanges
The proposed establishment of a new stock exchange in India has caused a revival of the debate pertaining to regulation of stock exchanges. There are unique issues: stock exchanges are not only profit-making institutions that are companies in form and substance, but they also carry out a regulatory role in respect of companies that are…
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NCLT and NTT: Questions of “Intrinsic Judicial Functions”
Recently, a Constitution Bench of the Supreme Court (headed by Balakrishnan C.J.) finished hearing arguments on the constitutionality of the proposed National Company Law Tribunal (NCLT), and judgment has been reserved. The matter arose out of an appeal against a Madras High Court decision in R. Gandhi v. Union of India. The principal challenge to…
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Directors are persons in control; failure to disclose their shareholding violates Takeover Regulations
In a far-reaching decision, the Securities and Exchange Board of India has ruled in an adjudication order that members of the board of directors of a listed company (“Target Company”) would be persons having control of the Target Company. Consequently, directors of the Target Company ought to make disclosures of their holdings under the disclosure…
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Securitisation and Debt Recovery – A Centre-States Conflict?
The Constitution has devised an elaborate scheme of distribution of legislative powers, and the competence of a legislature to enact a law has normally been challenged by a private citizen to whom the law applies. The latest battleground looks to be the fairly recent structure of securitization, debt recovery and other FI-friendly legislation. The first…
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The Continuing Debate on Governance in Government Companies
When Government companies list their shares on stock exchanges, they are required to deal with two distinct constituencies from a corporate governance standpoint: one, being the Government itself as the controlling shareholder or promoter, and the other, being the minority (public) shareholders. When the Government is in a controlling position in the company, the obvious…
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Non-Discrimination: Protecting foreign-owned subsidiaries
A recent decision of the Pune Bench of the Income Tax Appellate Tribunal in Daimler Chrysler v. DCIT deals with several important issues. One of these was whether the provisions of a Double Taxation Avoidance Agreement would apply in the absence of double taxation. The Tribunal held that given the role DTAAs play in modern…
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Further watering down of section 14A, Income Tax Act
Close on the heels of the decision of the Bombay High Court in Reliance Utilities & Power, which possibly has significant implications on the interpretation of section 14A of the Income Tax Act, the Bombay ITAT has, in a recent decision, taken a further step with the potential of limiting the inequity resulting from the…
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Indirect FDI: A Further Press Note
Continuing with the series of press notes on the issue of indirect foreign direct investment (FDI), the Government has issued Press Note 4 of 2009 that clarifies the position on downstream investment by Indian companies. Here are some quick thoughts on the new Press Note: 1. The Press Note divides downstream investments into three categories:…
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Taxing times for the software industry
ET reports that the software industry has witnessed a 40 % drop in sales as a result of recently introduced taxation provisions. After the decision of the Supreme Court in Tata Consultancy Services v. State of Andhra Pradesh, (2005) 1 SCC 308, the sale of ‘branded’ software like Microsoft products has been subject to the…
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Is it time to sentence Share Warrants to Dishonorable Discharge?
(SEBI DIP Guidelines amendments – Part 2) Several amendments have been made to the SEBI DIP Guidelines as briefly highlighted here. I am sharing a few more thoughts on two areas, but in separate posts. This post focuses on the increase of minimum deposit on Share Warrants from 10% to 25% of issue price. This…
