The Tata-Mistry episode has brought into focus the minimum shareholding threshold required for a minority shareholder to bring an action for oppression and mismanagement under sections 241 to 244 of the Companies Act, 2013. In a piece in Bloomberg Quint titled Minority Shareholder Protection as a Numbers Game, I examine the implications of such shareholding thresholds that operate as a filter...
Announcing the Socio-Legal Review Forum
[Announcement from the Editorial Board of the Socio-Legal Review] The Editorial Board of the Socio-Legal Review is proud to announce the launch of its online companion/blog, the Socio-Legal Review Forum. Since its inception in 2005, SLR has strived to further the discourse on the intersection of law and society. Over the past decade, it has provided both students and scholars...
Legal Rights and the Vicissitudes of a “Comma”
“For want of a comma, we have this case”: thus began a judgment of the United States Court of Appeals For the First Circuit rendered earlier this week in O’Connor v. Oakhurst Dairy. The punctuation mark in question was more specifically the “Oxford comma”, which has been referred to as “an optional comma before the word ‘and’ at the end of a list”. This case involved a law enacted in...
The Potential for an Online Private Placement Platform in India
[Guest post by Rishi A, a 5th year at Hidayatullah National Law University, Chhattisgarh] The London Stock Exchange (LSE) has a program that it runs for small and medium scaled enterprises called the ELITE Programme. Providing services like professional advice from industry experts about value-creation and also assistance in issues relating to raising of funds, it requires the enterprises to (i)...
SEBI’s Interference in a Compliance Officer’s Decision under Insider Trading Regulations – A Recent Informal Guidance
[Guest post by Suvan Law Advisors, a law firm specializing in regulatory laws. They can be reached at [email protected]. Disclosure: Partners of Suvan Law Advisors contributories to Justice Sodhi Committee Report on Insider Trading.] SEBI has issued a ‘path-breaking’ Informal Guidance dated February 3, 2017 to Kirloskar Chillers Private Limited (“Kirloskar Private”), which has been made public by...
Supreme Court’s decision on the Competition Act raises concerns
[Guest post by Varun Thakur, BA.LL.B fourth year student at National Law University, Jodhpur.] The Supreme Court of India (‘SC’ or ‘the Apex Court’) has for the first time ruled on the substantive provisions under the Competition Act, 2002 (‘Competition Act’ or ‘the Act’) in the case of Competition Commission of India (‘CCI’) v. Coordination Committee of Artists and Technicians of WB Film and...
SEBI’s Special Treatment to Public Sector Banks
[Guest post by Abhishek Borgikar, who is a Senior Associate at Dhaval Vussonji Alliance] Violation of Minimum Public Shareholding Norms The former chairman of the Securities and Exchange Board of India (SEBI), Mr. U. K. Sinha, while talking about minimum public shareholding in public sector companies said: “Our [SEBI’s] stand as a regulator is that all cos should be treated alike on all matters...
Supreme Court on Independence and Impartiality of Arbitrators
[Guest post by Sneha Bhawnani, Assistant Legal Advisor at Vinod Kothari & Company (Kolkata) and Swatilekha Chakraborty, BBA.LL.B final year student at Symbiosis Law School, Pune.] One of the ways in which efficacy and efficiency of alternate dispute resolution mechanisms can be ascertained is by ensuring the independence and impartiality of the arbitrators. The Supreme Court of India...
SEBI Order Denying Inter-se Promoter Transfer Exemption
[Guest post by Shashank Prabhakar, who is a lawyer with Finsec Law Advisors] The Whole Time Member of the Securities and Exchange Board of India (SEBI) recently passed an order relating to an application under Regulation 11(5) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the Takeover Regulations) for exemption from making an open offer under Regulation 3(2)...
NCLT Rules on Maintainability in the Tata-Mistry Case
Background The action on the legal front in the Tata-Mistry episode has been playing out in the National Company Law Tribunal (NCLT) over the last few weeks. This is on account of an action for oppression and mismanagement initiated by two Mistry companies (the Mistry Group) that are shareholders of Tata Sons against the company as well as its directors and officers. The action was brought under...
Call for Papers: Indian Journal of Tax Law
[Announcement from the Indian Journal of Tax Law] The Indian Journal of Tax Law (‘IJTL’) is a biannual journal dealing with taxation. The Journal is published by an independent organization of students from National Law University Odisha. IJTL is India’s first student edited, peer reviewed law journal focusing on taxation. The journal is focused towards enabling innovative academic research and...
Disclosure of all ‘actions’ against foreign promoters under ICDR Regulations
[Guest post by Nikunj Agarwal, a fifth-year B.A., LL.B (Hons.) student at Dr. RML National Law University, Lucknow] In recent years, India witnessed a steady increase in foreign investment in the Indian economy. The preceding year also saw many private equity funds and other institutional investors making an exit through the initial public offering (IPO) route. However, legal issue amounting to a...
Abolition of the Foreign Investment Promotion Board
The economic liberalization that began in India in 1991 brought with it a substantial increase in foreign direct investment (FDI) since then. Those involved in, or following, these developments, since the 1990s will remember the rather significant role played by the Foreign Investment Promotion Board (FIPB) in approving FDI into the country. Foreign investors (or their Indian partners or investee...
Supreme Court Reinforces Sanctity of a Takeover Offer
In what circumstances can a takeover offer, once made, be withdrawn? This issue has occupied the attention of the Supreme Court in two previous cases, Nirma Industries v. Securities and Exchange Board of India and Securities and Exchange Board of India v. Akshya Infrastructure Pvt. Ltd. In these cases, the Supreme Court took a strict view and held that the acquirers were not permitted to withdraw...
SEBI accuses statutory auditors for fraud, etc.
SEBI has passed an interim order against various persons which also doubles up as a show cause notice (“SCN”) on the erstwhile statutory auditors (“the Auditors”) of a listed company. The Auditors are asked to show cause why directions should not be issued to debar them from issuing certificates under several specified securities laws. While directions have been issued against the concerned...
The M&A Environment in Brazil – A Guide for Indian Acquirers
My learned colleague Rodrigo and I have written an article on the M&A environment in Brazil (from an Indian buyer’s perspective). It is available at and I have also excerpted it below. Background Brazil is the world’s fifth largest country and with an estimated population of 200 million, it is also the world’s fifth most populous country after China, India, USA and Indonesia. Brazil is a...
The Introduction of Interest Rate Options In India
[The following guest post is contributed by Niharika Choudhary, who is a 4th year student at the National Law University, Jodhpur] Introduction Trade in financial derivatives has led to an enormous growth of the Indian financial system. New instruments have proliferated and trading volume has exploded. The use of financial derivatives has transformed the way financial institutions deal with risk...
Regulating India’s FinTech
[The following guest post is contributed by Vaibhav Parikh, who is a business lawyer associated with the Aditya Birla Group] “Disruption” is often used as a generic term to describe situations where smaller and newer companies with fewer resources are able to successfully challenge established incumbent businesses and upset status quo. Although a case has been made that it brings visibility to an...
A New Book on India’s Intellectual Property Dilemmas
[Guest post by Prashant Reddy (Research Fellow, School of Law, Singapore Management University) and Sumathi Chandrashekharan (Senior Resident Fellow, Vidhi Centre for Legal Policy) on their new book] About four years ago, in a game-changing case, the pharmaceutical giant Novartis AG, lost the rights to their patent in India covering one of their best-known chemotherapy drugs, Gleevec, after a...
Integrated Reporting by Indian Companies
[The following guest post is contributed by Nivedita Kannan, who is an associate company secretary with a keen interest in corporate law. She can be reached at [email protected]] The Securities and Exchange Board of India (SEBI), by way of its circular issued on 6 February 2017 (Circular), advised the top 500 listed companies in India to adopt Integrated Reporting on a voluntary basis from...
The Death of the “Absolute Interest”
[The following guest post is contributed by Aditya Swarup, who is an Assistant Professor at the Jindal Global Law School] In the seemingly complex world of corporate finance, creditors often face questions on the kind of security that ought to be taken by the them to support the loan to the borrower, answers to which depend on the relationship between debt and equity of the company. A further...
Shareholder Primacy in India: So Near and Yet So Far!
[The following guest post is contributed by Professor Bala N. Balasubramanian, who is an Adjunct Professor at the Indian Institute of Management, Ahmedabad.][1] The scholarly debate on primacy among the shareholders, boards and the executive in corporate governance is intellectually as challenging as it is yet inconclusive, although more recent trends around the world would seem to suggest at...
Survey of Corporate Governance in Asia
The OECD has just published its OECD Survey of Corporate Governance Frameworks in Asia. Covering 14 different economies in Asia, the Survey covers various aspects of corporate governance from ownership structures, regulatory issues, board matters, shareholder rights, and the like that are prominent in relation to corporate governance of companies in those countries. The key is that in most of...
Issue of Convertible Notes by Startups Permitted
[The following guest post is contributed by Bhushan Shah & Neha Lakshman from Mansukhlal Hiralal & Company. The views expressed in the post are personal] A convertible note is an instrument issued as debt and convertible into equity of a startup at the option of the holder, upon a future contingency taking place, usually when the startup obtains an additional round of investments...
Listing of Stock Exchanges and Addressing Conflicts of Interests
A few years ago, we had discussed possible issues that arise out of the commercial operations of a stock exchange. While an exchange is a profit-making institution and is required to act in the interests of its shareholders, it also carries out a regulatory role in selecting companies that are to be listed on it and thereafter in overseeing their compliance with the listing requirements. These...
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