[Other posts related to this topic are available here and here.] In 2013, we had discussed an order of the Central Electricity Regulatory Commission (CERC) in a matter involving Adani Power. The brief facts of the case, as discussed therein, are as follows: Adani Power had entered into separate PPAs with Gujarat Urja Vikas Nigam Limited and two Haryana utilities under which Adani Power had agreed...
The Supreme Court on the SAT’s jurisdiction over SEBI Circulars
[Guest post by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai] Last month, the Supreme Court of India (“SC“) in the case of National Securities Depository Limited v. Securities and Exchange Board of India ruled that the administrative and legislative orders made by the Securities and Exchange Board of India (“SEBI“) are not assailable before the...
Has SEBI Altered Its Position on the Question of “Control”?
The issue of what amounts to “control” for purposes of the SEBI Takeover Regulations has been a vexed one, and has eluded any form of resolution for nearly 15 years. In a paper titled “The Nature of the Market for Corporate Control in India”, I have sought to summarize the present position (footnotes omitted): Under Indian takeover regulation, it is possible to trigger the [mandatory bid rule...
SAT on Holding Period for Inter Se Promoter Transfers
Mandatory takeover offer requirements are subject to certain exemptions. One such exemption is when there is an inter se transfer of shares among promoters of a company, so long as certain conditions are satisfied. One such condition, stipulated in regulation 10(1)(a)(ii) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the “Takeover Regulations”), is that the...
Incorrect Prefixes to Company Names
A longstanding misconception is finally sought to be rectified by the Bombay High Court in a Circular issued on 3 April 2017 (via LiveLaw), the extracts of which are as follows: IT IS OBSERVED by the Hon’ble Shri Justice G. S. Patel while hearing Chamber Summons No. 89 of 2017 in Execution Application (L) No. 198 of 2017 in Arbitration Case No. 1 of 2014, on 8th March, 2017, that for...
Finance Act Amendments to the SEBI Act and the SCRA: Parliament Settles the Roofit Question
[Guest post by Shashank Prabhakar, who is a lawyer with Finsec Law Advisors] The Finance Bill, 2017, which has been passed by both the houses of Parliament and which was assented to by the President of India on 3 April 2017, has amended certain provisions of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and the Securities Contracts (Regulation) Act, 1956 (“SCRA”). The most...
MCA’s Notification for Enhanced Exemptions Under the Merger Control Regime
[Guest post by Varun Thakur, BA.LL.B fourth year student at National Law University, Jodhpur.] In a notification dated 27 March, 2017, the Central Government, exercising its powers under the Competition Act, 2002 (‘the Act’), has issued a notification containing certain clarifications for easing compliance under the merger control regime. These interpretations are aimed at ensuring the...
Supreme Court on Vicarious Liability of Corporate Officers
[Guest post by Rahul Bajaj, a final year law student at the University of Nagpur and a SpicyIP fellow] The issue of corporate criminal liability has always been a vexed one, raising as it does profound jurisprudential questions that go to the heart of the separate legal status enjoyed by companies. As Professor Varottil noted in his analysis of the Sunil Bharti Mittal judgment on this Blog that...
Debt Restructuring Through Scheme of Arrangement
I have posted a working paper titled “The Scheme of Arrangement as a Debt Restructuring Tool in India: Problems and Prospects” on SSRN, the abstract of which is as follows: The goal of this paper is to analyse the scheme of arrangement as a debt restructuring tool in India and the extent to which it has been utilised. It finds that the scheme has been used sparingly for debt restructuring in...
Can trustees contract out of fiduciary liabilities?
[The following post is contributed by Shreya Rao and Vakasha Sachdev at Rao Law Chambers] Trust law in India has not kept up with the times. The last few years have seen an increase in the incidence of sophisticated trust structures, particularly in the private wealth and fund industries. However, changes to the law governing trusts have substantially been introduced in ad hoc form by tax...
Supreme Court on DRT’s Jurisdiction for Small Debts
[Guest post by Yudhvir Dalal, 5th Year B.A.LL.B. (Hons.), The National University of Advanced Legal Studies (NUALS), Kochi.] The Supreme Court late last year in State Bank of Patiala v. Mukesh Jain[i] held that under section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’) a Debt Recovery Tribunal (‘DRT’) is entitled...
Hush of the Whistleblower
[Guest post by Malek Shipchandler, who practices law with a firm in Mumbai. Views are personal and do not necessarily represent those of the firm.] The ongoing controversy at one of India’s most celebrated companies, built on high standards of corporate governance, raises some interesting issues for consideration from a whistleblower perspective. It was earlier reported that the Indian...
SAT on Interest Payment Obligations under the SEBI Act
Readers may recall that the securities law were amended in 2013 in order to confer significant enforcement powers on SEBI. This was done initially by the Securities Laws (Amendment) Ordinance, 2013 that was promulgated with effect from 18 July 2013. The Ordinance had to be re-promulgated before the amendments finally took shape by way of the Securities Laws (Amendment) Act, 2014. Among the...
Shareholding Thresholds for Oppression and Class Actions
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...
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