Blog Posts
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Do Auctions in Public Offerings Work?
The SEBI (Issue of Capital and Disclosure) Regulations, 2009 were recently amended to provide for “French” auction as one of the methods of price discovery in follow-on public offerings. This was supposedly brought about with a view to encourage the use of such auction mechanism in Government disinvestments. However, the results emanating from the first…
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Enhanced Corporate Governance Practices
Although the Satyam episode invited close scrutiny of the corporate governance norms and practices that were prevalent in India, there is some evidence that it has acted as a wakeup call in enhancing board practices. As Arun Duggal observes in a recent Wall Street Journal column: The first reaction of corporate boards when Satyam blew…
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Legal Issues in Stock Lending
We had earlier noted the recent relaxations introduced by SEBI in order to provide a thrust to the securities lending and borrowing (SLB) mechanism and thereby short selling of securities. Some doubts were expressed regarding the sustainability of even the reformed process. In a column in today’s Mint, Jayant Thakur highlights several legal issues that…
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New Blog for Indian Legal Research
I would like to highlight the Legal Research India blog recently started by Arjun Sheoran, student at the National Law School of India University. Essentially, the blog allows readers/users to search the web for relevant legal materials. The search is a Google custom search; with the advantage that it is restricted to some selected websites,…
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Corporate Restructuring and the Business Purpose Rule
In 1935, the House of Lords famously observed that “every man is entitled to order his affairs” in order to minimise his liability to tax (IRC v. Duke of Westminster, [1936] AC 1). This is the dictum that is often cited as the source of the rule that while tax avoidance is legal, tax evasion…
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Buyback and Takeover Regulations – Yet another development
See my earlier post on a recent decision of SEBI on whether increase in percentage holding consequent to buyback of shares would amount to “acquisition” under the Takeover Regulations. If that and earlier posts are reviewed, one would note that SEBI has taken a fairly consistent stand that such increase does amount to acquisition. Now,…
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Buyback, increase in shareholding and open offer requirement
Yesterday’s decision of SEBI revives the discussion on whether an increase in shareholding on account of a buyback could result in an open offer. The issue can be explained mathematically as follows. A company, has, say, Rs. 100 of share capital. It carries out a buyback of Rs. 20 shares in which some shareholders do…
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Political Contributions by Companies
Last week, the U.S. Supreme Court pronounced an important judgment in Citizens United v. Federal Election Commission on the issue of political spending by corporations in elections. The New York Times has a summary: Overruling two important precedents about the First Amendment rights of corporations, a bitterly divided Supreme Court on Thursday ruled that the…
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U.S. Financial Reforms: The “Volcker Rule”
Last week, the U.S. unveiled a series of reforms to deal with some of the lessons learnt from the financial crisis. Following is an extract of the President’s remarks that outline the proposals: First, we should no longer allow banks to stray too far from their central mission of serving their customers. In recent years,…
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Duties of an Official Liquiator: TCI Distribution v. OL
I had previously posted on a decision of a Single Judge of the Madras High Court on the role and duties of an Official Liquidator. The facts in TCI Distribution Centres v. Official Liquidator (C.A. 1953/2008 in C.P. 526/2000) were that the Official Liquidator had sold certain properties through an auction-sale. The auction-purchaser later found…
