Blog Posts
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SEBI amends DIP Guidelines – quick highlights
[Posted by Jayant Thakur] SEBI has amended the DIP guidelines vide circular dated 24th February 2009. Several amendments have been made and while some are minor or consequential to other amendments made recently, some are far reaching. While I will post more detailed comments later, let me quickly highlight a few important changes. 1) Listing of equity…
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Interim Budget: A Brief Overview
[Posted by Mihir Naniwadekar] A few days ago, the Union Government announced the Interim Budget 2009-2010. This post seeks to briefly highlight some of the important issues it raises. The long title of what is usually the year’s-most-awaited legislation – the Finance Bill – set the tone of the budget. The Finance Bill, 2009, is…
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Securitization: ‘True Sale’ of Receivables
[Posted by Umakanth Varottil] In order to make a securitization transaction bankruptcy-proof with respect to the originator (seller) of receivables, it is necessary that there is a ‘true sale’ of the receivables to the assignee (purchaser). Failing this, the transaction could be recharacterized as a secured loan, thereby altering the rights and obligations of the…
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Have liaison offices escaped the tax net?
[Posted by V. Niranjan] After the Department’s partial victory of sorts in the Vodafone tax battle, recent decisions of various Tribunals holding that liaison offices are generally not subject to taxation come as much needed relief for MNCs. This, however, is subject to a few qualifications. As the decision of the AAR in Ikea Trading…
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Amendments to Takeover Regulations differently wide and narrow
[Posted by Somasekhar Sundaresan] The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (“Takeover Regulations”) were amended last week to empower SEBI to grant exemptions from the strict operation of various operative provisions of the Takeover Regulations – initial comments on this blog were posted here. I wrote the following comment in the Economic…
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New PCAOB Rule: Impact on U.S.-listed Indian Companies
[Posted by Umakanth Varottil] The PCAOB or Public Company Accounting Oversight Board is a body established in the aftermath of Enron and the enactment of Sarbanes-Oxley and reviews the intensity and the integrity of audits by auditors on a regular basis. Until recently, the requirements of review pertaining to foreign companies (such as Satyam) that…
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Imminent Developments in Competition Law
[Posted by Umakanth Varottil] Guest contributor R.V. Anuradha points to a news report indicating that the long-awaited Competition Commission of India (CII) would be functional on April 1, 2009. This will replace the existing Monopolies and Restrictive Trade Practices Commission (MRTPC) signifying an important step in Indian competition law. As the news report states, that…
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A Way around Daga Capital?
[Posted by Shantanu Naravane] An earlier post had discussed a decision of a Special Bench of the Mumbai Income Tax Appellate Tribunal (ITAT) in Daga Capital [26 SOT 603], highlighting its far-reaching implications on expenditures incurred ‘in relation to’ the earning of tax-free income under the Income Tax Act (Act). The Special Bench, following the…
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Direct and Indirect Foreign Investment: Is There Clarity Now?
[Posted by Umakanth Varottil] Last week, we had blogged about new guidelines that were announced on indirect foreign investments, wherein some questions were raised regarding the scope of these guidelines. However, since then, the Government has issued two Press Notes on February 13, 2009 that contain detailed provisions for implementation of the new guidelines. Press…
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Proposal for Uniform Par Value on Shares
[Posted by Umakanth Varottil] In a previous post, we discussed the difficulties posed by the current system of par value of shares whereby companies are free to determine the par value of their shares. Some of these difficulties will be addressed in SEBI’s proposal to create a uniform par value system for all listed companies.…