Blog Posts
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Moore Stephens: Extending Protection for Auditors
Moore Stephens v. Stone & Rolls might well be the most important case on auditors’ liability since Caparo v. Dickman . The House of Lords, by a narrow majority, extended the protection which Caparo offers to auditors even further. The facts, as detailed by Lord Phillips, were that the sole “directing mind” of a company…
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Contracts of Sale, Works Contracts, and TDS
Tax deducted at source (TDS) has proved to be a controversial area of law for quite some time now. One issue that has most recently come to light is likely to have enormous commercial significance – under what circumstances is a company obliged to treat an ordinary transaction as a “works contract” and not a…
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Is levy of penalty mandatory for Securities Laws’ violations?
– Decoding the decision of the Supreme Court in Shriram’s case 1. Is levy of penalty for violation of securities laws mandatory? Is there no discretion to the Adjudicating Officer on whether or not to levy penalty? Are adjudication proceedings a mere formality? Is intention to commit the violation totally irrelevant? And, finally, are all…
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SEBI issues circular to formalise clarifications on 5% additional creeping acquisition
I had briefly written in an earlier post of a report in CNBC/moneycontrol.com of certain “clarifications” in respect of the amendments to Regulation 11(2) of the SEBI Takeover Regulations. As may be recollected, the amendments permitted acquisition of further shares upto 5% for persons who held shares between 55-75%. This press report has now been…
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Companies Bill Reintroduced in Parliament
Last October, the Companies Bill 2008 was introduced in Parliament with a view to simplify and modernize company law by replacing the Companies Act, 1956. However, the Companies Bill lapsed with the dissolution of the Lok Sabha earlier this year due to the general elections. In the meanwhile, corporate India witnessed the massive financial fraud…
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Corporate Opportunities: A “Scope of Business” Exception?
A couple of weeks ago, Corporate Law and Governance highlighted a decision of the Court of Appeal in O’Donell v. Shanahan, reasserting the strictness of a director’s fiduciary duties. A leading decision on the point of the director’s fiduciary duties was Regal (Hastings) v. Gulliver, [1942] 1 All ER 378, where the duties were held…
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Landmark Judgment on the Role of the Debt Recovery Tribunal
The role of the Debt Recovery Tribunal has been the subject of a great deal of controversy. Some aspects of this issue have been discussed on this blog. The main question has been whether an independent suit filed by a borrower against a bank in a civil court could be transferred to the DRT as…
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Warrants and Voting
My friend Jayant Thakur posted a critique on July 31 on the recent SEBI Order in the case preferential allotment of warrants to promoters. Umakanth dealt with the element of potential prohibition of voting in areas of conflict of interest on August 1. Here is a piece I wrote in the Business Standard today, with…
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Shareholders and Their Duties under Indian Law
Under the Companies Act, 1956, shareholding in an Indian company is almost entirely associated with concepts like rights, entitlements and ownership. This emanates from Section 82, which reads as follows: The shares or debentures or other interest of any member in a company shall be movable property, transferable in the manner provided by the articles…
