Blog Posts
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SEBI’s Proposed Changes on Disclosures and Audit Norms
After the Satyam fraud earlier this year, there was expectation of significant regulatory changes that strengthen corporate governance, disclosure and audit norms in India companies. Some changes did occur almost immediately; for instance, detailed measures were introduced favouring disclosure of pledges by promoters. However, the Companies Bill, 2009 introduced in Parliament a few weeks ago…
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A Change in the Law of Depreciation
A recent decision of the Bombay High Court in CIT v. M/s Techno Shares & Stocks Ltd. seems to have greatly narrowed down the scope of depreciation under the Income Tax Act. Although the issue before the Court was only whether depreciation can be granted on a Bombay Stock Exchange Membership Card, the rationale of…
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Corporate Frauds and Regulatory Shortcomings: SEC’s Madoff Report
A few days ago, the U.S. SEC’s Office of Inspector General (OIG) released a report (over 450 pages) identifying various lapses that led to SEC’s failure to uncover Madoff’s Ponzi scheme much earlier than December 2008 when the scandal broke out. To the interested reader, the executive summary might be more manageable given the length…
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Doing Business 2010: India’s Performance
Doing Business 2010, a co-publication of the World Bank and the International Finance Corporation has bee released. Compared to India’s ranking of 132nd last year, it has dropped one notch to 133 this year. It has been noted that despite reforms during this period, India has been outperformed by other similarly-situated economies during the period.…
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Revamping the Takeover Code
After consolidating the regulations relating to primary markets (as discussed in the previous post), SEBI has embarked upon the next exercise of revamping the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (popularly known as the Takeover Code). It has appointed a Takeover Regulations Advisory Committee (TRAC) to advise on changes to the made…
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Revised Primary Capital Market Norms
In the 17 years that SEBI has been in existence, the rules pertaining to issue and sale of capital to the public have undergone sea-change. This is not surprising as the nature and size of the Indian primary markets have witnessed significant growth in these years. The primary market norms (post the creation of SEBI)…
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Taxation of non-residents: More controversy
This blog has covered the controversy surrounding the taxation of Indian companies for engaging services from abroad. A recent decision of the Karnataka High Court has made the law even more difficult to ascertain. The decision is that of a Division Bench of the Court, in Jindal Thermal Power Co. Ltd. v. Deputy Commissioner of…
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FDI in the Small Scale Sector
Historically, there have been limited options for small-scale undertakings in India to obtain FDI. For instance, FDI was limited to 24%. FDI beyond this limit was permissible only if the unit deregistered itself as a small-scale unit. This policy has been relaxed by way of Press Note 6 of 2009, which permits micro and small…
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Derivatives and Underlying Assets
In a very interesting article published in the Journal of Business Law in 2007, Professors Green and Saidov had this to say of software: “…its unique characteristics mean that it is not truly analogous to any conventional chattel with which the law is familiar… despite the fact that it is one of the most ubiquitous…
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Fraud and Bank Guarantees
Often, it so happens in the commercial world that a contract between two parties requires one to provide a performance guarantee to the other. Accordingly, the party provides a bank guarantee; but the guarantee itself is expressed to be “unconditional” and “irrevocable”. The understanding of the parties is that the guarantee will be utilized and…
