Blog Posts
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Foreign Currency Borrowings: FCEBs and ECB
In an earlier post, we had analysed the notification of the Government of India permitting the issuance of Foreign Currency Exchangeable Bonds (FCEBs). The Reserve Bank of India (RBI) was expected to prescribe detailed guidelines on the mechanism for the issuance of FCEBs. It is now reported in LiveMint that the detailed guidelies would be…
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Bharti-MTN: Structural Problems
The proposed deal between Bharti and MTN to combine their businesses fell through over the weekend. Although the principal reason for the fallout appears to be disagreement over who would control the combined entity, that was aided by problems with structuring the deal from a regulatory perspective. As The Economic Times reports: “In addition, there…
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A Possible IDR Debut in the Indian Markets
A few months ago, we had lamented about the lack of even a single issuance of IDRs by foreign companies in the Indian markets; this, despite the relaxation of rules in 2007 to facilitate IDR listings. We had said: “Indian Depository Receipts (IDRs) are instruments that enable foreign companies to access the Indian capital markets.…
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Role of Rating Agencies
Credit rating agencies have come under fire on account of their role in the recent global financial crisis arising out of the repackaging of subprime mortgage debts. This has resulted in a call for tighter regulation of rating agencies. But, this revelation in Financial Times is startling: “Moody’s awarded incorrect triple-A ratings to billions of…
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Taxation on Sale of Shares in a Foreign Holding Company
Often, divestments by foreign owners of Indian companies are effected through a sale of the stake outside India. More specifically, where foreign companies hold shares in Indian companies through intermediate offshore investment companies, they can effect a divestment by merely selling off shares of the offshore holding companies. This does not in any way result…
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Taxation on Slump Sales
A ‘slump sale’ is one of the methods available to give effect to a transfer of a division or undertaking of a company to another company. Under this method, all the assets and liabilities of (or relatable to) the undertaking are transferred for a ‘lump sum’ consideration without assigning values to the individual assets and…
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Training Directors
I had earlier posted about the Chartered Director test prescribed by the Institute of Directors in London, which is a qualifying examination for directors on corporate boards. In response, one our readers from Australia, Susie Reece Jones, has been kind enough to provide us with some details about the situation in Australia in this regard.…
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SEBI Eases Payment Norms in Public Offerings
On May 13, 2008, SEBI created a new method of payment or earmarking of funds for subscription to securities in a public offering. The press release states: “Easing of payment process in public / rights issue: The Board approved, in principle, the concept of marking lien on bank account as an alternative mode of payment…
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FIIs and Offshore Instruments: Another SEBI Order Set Aside
Readers may recollect that the Securities Appellate Tribunal (SAT) in 2005 overturned the order of SEBI prohibiting UBS, its affiliates and agents from issuing offshore derivative instruments (ODIs) with underlying Indian securities for a period of one year (on account of UBS’ failure to provide infromation about investors to whom it had issued such ODIs).…
