Blog Posts
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From ‘Oppression’ to ‘Prejudice’?
In this post, I had noted that the proposed Companies Bill appears to introduce some substantive changes in the law dealing with oppression (covered under Section 397 of the present Act). The proposed Companies Bill, 2009 states, in Section 212: “212. (1) Any member of a company who complains that— (a) the affairs of the…
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‘Manufacture’ in Income Tax
The decision of the Supreme Court in CIT v. Oracle Software is set to add another controversy to the many that already exist with respect to taxation. Involving the interpretation of the term ‘manufacture’, which has been a contentious issue in the excise law context, the decision gives rise to a couple of interesting issues.…
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Southern Technologies and Sticky Interest – Part II
We discussed the recent decision of the Supreme Court in Southern Technologies that rejected a challenge to the constitutionality of ss. 36(1)(vii) and 43D of the Income Tax Act, 1961. The Court held that non-banking-financial institutions [“NBFC”] must account as income interest received from loans that are, for commercial purposes, bad debts. Four important issues…
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Expansion of Currency Futures Trading
Currently, only US Dollar-Indian Rupee (INR) currency futures contracts can be traded on Indian stock exchanges. It has been decided to expand the market by introducing trading on currency futures in 3 other currencies: Euro-INR, Japanese Yen (JPY)-INR and Pound Sterling (GBP)-INR. Both SEBI as well as RBI have issued notifications to that effect. OTC…
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Newer Pricing Options in Public Offerings
A couple of months ago, SEBI permitted companies undertaking follow-on public offerings (FPOs) to price their shares freely above a floor price and on the basis of the price the bidders have quoted. However, retail investors would be allotted shares at the floor price. This was also in preparation for a slew of offerings by…
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ACGA White Paper on Corporate Governance
Continuing with the spate of reform-related activity surrounding Indian corporate governance, the Asian Corporate Governance Association (ACGA), based in Hong Kong, yesterday issued the ACGA White Paper on Corporate Governance in India. I find the White Paper of interest for two reasons. First, it seeks to supplement the existing reform process in India that is…
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Supreme Court Rejects NBFC Claim on Sticky Interest – Part I
Non-banking-financial institutions (“NBFCs”) face a serious setback after the judgment of the Supreme Court this Monday (11 January 2010) in Southern Technologies Ltd. v. JCIT. This blog has discussed a long-standing controversy in Indian law on the treatment of “sticky” advances. It is useful to briefly recapitulate the contours of this controversy before considering the…
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Relief for Investor Community on “Control” Debate
Background Under the SEBI Takeover Regulations, there are two methods by which an acquirer could be obligated to make an open offer to the public shareholders of a listed target company. The first is when the acquirer acquires shares or voting rights beyond certain defined thresholds (as contained in Regulations 10 and 11, with the…
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Another SEBI Order on Participatory Notes
About a month ago, we discussed SEBI’s order in the case of Barclays Bank in relation to the issue of participatory notes/ offshore derivative instruments (ODIs). Barclays had been prohibited from issuing, subscribing or otherwise transacting in any ODIs until reporting systems are put in place to the satisfaction of SEBI. Close on its heels…
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New Development on Section 14A, Income Tax Act
Several prior posts have discussed the decision of the Special Bench of the Mumbai Income Tax Appellate Tribunal in Daga Capital, on the appropriate interpretation of section 14A of the Income Tax Act. It was also observed that the problem was not so much with the provision per se, as with Rule 8D of the…
