Blog Posts
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Core Investment Companies – Draft RBI Guidelines
[Posted by Umakanth Varottil] (The following post has been contributed by Vijay Kumar, a lawyer and a company secretary by qualification, who is practising as an Advocate in the Chennai High Court with the law firm of Iyer and Thomas) Non – Banking Finance Companies have been classified as a. Asset Finance Company b. Investment…
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The ULIPs controversy and a Delhi High Court decision
[Posted by Jayant Thakur] The ULIPs SEBI/IRDA tussle takes new turns practically every week and would not warrant further posts to my last one, (which was also followed by another post by a learned contributor) till either the Court decides the issue or the law is amended. However, I stumbled across a recent decision of…
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Changes to Minimum Pricing Norms for FDI in Unlisted Companies
[Posted by Umakanth Varottil] (The following post is from Tanmay Amar, senior associate at Luthra & Luthra. Tanmay discusses a significant change to the minimum pricing norms for issue of shares by Indian companies to foreign investors. This change is bound to affect the manner in which valuations are to be arrived at, especially for…
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Porrits & Spencer: Form over Substance Reaffirmed
[Posted by Mihir Naniwadekar] We have extensively discussed issues around tax avoidance previously; and one of the questions in this regard is the exact relationship between the 5-Judge Bench decision in McDowell and the subsequent 2-Judge Bench decision Azadi. To briefly recapitulate, in McDowell, Justice Chinappa Reddy took a strong stance against tax avoidance and…
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Meaning of ‘work’ under section 194C
[Posted by Shantanu Naravane] In a decision last delivered last month, the Bombay High Court once again visited the debate over the meaning of ‘sale’, in the process of clarifying the scope of the obligation to deduct tax at source under section 194C of the Income Tax Act. The factual matrix before the Court involved…
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Substance over Form in Taxation: The Recent English Approach
[Posted by Mihir Naniwadekar] We have at several times on this blog discussed issues around the legality of tax avoidance. In debates around avoidance/evasion distinction, reference is often made to the classic English cases – Duke of Westminster, Ramsay, Furniss, Macniven and others. In this background, it might be useful to consider the latest approach of…
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SEBI’s “Advisory Instructions” to BSE
[Posted by Umakanth Varottil] In a somewhat unconventional order, SEBI has on April 20, 2010 issued “advisory instructions” in a matter involving the Bombay Stock Exchange Limited (“BSE”). It arises out of a letter by the BSE to SEBI dated July 2, 2004 containing a proposal to introduce a market making scheme in the derivatives…
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SEBI PLUGS LOOPHOLE IN BROAD-BASED CRITERIA FOR FIIs
[Posted by Somasekhar Sundaresan] The Securities and Exchange Board of India (“SEBI”) has issued a circular dated April 15, 2010 clarifying its stand on broad-based criteria for registration as foreign institutional investors (“FIIs”). See: http://www.sebi.gov.in/circulars/2010/cirimdfiic12010.pdf SEBI has clarified that if an entity has a feature of its structure, multiple classes of investors and multiple pools…
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Characterising a Joint Venture
[Posted by V. Niranjan] A joint venture, perhaps one of the most widely used vehicles of commerce, is principally of two types – an incorporated joint venture [“IJV”] and an unincorporated joint venture [“UJV”]. The shares of the IJV are held by the members of the joint venture, in proportions that typically reflect their respective…