Blog Posts
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The Continuing Debate on Governance in Government Companies
[Posted by Umakanth Varottil] When Government companies list their shares on stock exchanges, they are required to deal with two distinct constituencies from a corporate governance standpoint: one, being the Government itself as the controlling shareholder or promoter, and the other, being the minority (public) shareholders. When the Government is in a controlling position in…
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Non-Discrimination: Protecting foreign-owned subsidiaries
[Posted by Mihir Naniwadekar] A recent decision of the Pune Bench of the Income Tax Appellate Tribunal in Daimler Chrysler v. DCIT deals with several important issues. One of these was whether the provisions of a Double Taxation Avoidance Agreement would apply in the absence of double taxation. The Tribunal held that given the role…
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Further watering down of section 14A, Income Tax Act
[Posted by Shantanu Naravane] Close on the heels of the decision of the Bombay High Court in Reliance Utilities & Power, which possibly has significant implications on the interpretation of section 14A of the Income Tax Act, the Bombay ITAT has, in a recent decision, taken a further step with the potential of limiting the…
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Indirect FDI: A Further Press Note
[Posted by Umakanth Varottil] Continuing with the series of press notes on the issue of indirect foreign direct investment (FDI), the Government has issued Press Note 4 of 2009 that clarifies the position on downstream investment by Indian companies. Here are some quick thoughts on the new Press Note: 1. The Press Note divides downstream…
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Taxing times for the software industry
[Posted by V. Niranjan] ET reports that the software industry has witnessed a 40 % drop in sales as a result of recently introduced taxation provisions. After the decision of the Supreme Court in Tata Consultancy Services v. State of Andhra Pradesh, (2005) 1 SCC 308, the sale of ‘branded’ software like Microsoft products has…
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Is it time to sentence Share Warrants to Dishonorable Discharge?
[Posted by Jayant Thakur] (SEBI DIP Guidelines amendments – Part 2) Several amendments have been made to the SEBI DIP Guidelines as briefly highlighted here. I am sharing a few more thoughts on two areas, but in separate posts. This post focuses on the increase of minimum deposit on Share Warrants from 10% to 25%…
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Precision Remains Elusive with Investment Law
[Posted by Somasekhar Sundaresan] I wrote the following column in the Business Standard on February 23, 2009: In a bold move, the government has opened up foreign investment in an unprecedented manner. The move legitimizes many a structure that would have hitherto been keeping even their authors shy. The Cabinet Committee on Economic Affairs has…
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A Resurgence of Bank Nationalisations
[Posted by Umakanth Varottil] An offshoot of the global financial crisis has been the significant changes in economic policies in the developed world. The recent phenomenon relates to increasing calls from leading economists to nationalise troubled banks, particularly in the U.S. The concept of nationalisation was previously associated with the so-called ‘socialist’ economies, but is…
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Indirect FDI: More Changes on the Anvil
[Posted by Umakanth Varottil] In order to address the concern that Press Notes 2 and 3 of 2005 (discussed here) will allow foreign investors to take indirect stakes in sectors where foreign investment is otherwise prohibited (e.g. multi-brand retail trading), it is reported in the Economic Times that the Government is proposing to issue another…
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The Policy Over ECBs
[Posted by Umakanth Varottil] Satyajit Gupta has an interesting column in The Mint that reviews the changes in the external commercial borrowings (ECBs) policy over the last few years in the context of changing economic conditions both within India and around the world. As for recent efforts by the Reserve Bank of India (RBI), Satyajit…