Minimizing the Liability of Directors: SEBI’s Order in the Zylog Case

[Guest post by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai] Liability of directors is a sensitive topic in India, particularly for foreign investors who propose to nominate directors to the boards of their Indian investee companies. That is why clauses are inserted in shareholders’ agreements to the effect that the investor’s nominee director will not be identified...

Legal Claims: The Convergence of Law and Accounting

[Guest post by Pramod Rao, General Counsel at Citibank India] Many aspects of law and the accounting world coincide and converge especially in commercial enterprises. These are of immense relevance to the enterprise, the general counsel, the chief financial officer, the external/statutory auditors and business units or to control or support functions of the enterprise.  Among the aspects...

SEBI Board Meeting: Wilful Defaulters, Control, etc.

The meeting of SEBI’s board held today has resulted in some crucial decisions. An important one relates to SEBI’s new approach towards reconsidering the definition of “control” under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. This is because an acquirer who acquires control without obtaining the minimum number of shares (i.e. 25% voting rights) could be required...

Adoption of Indian Accounting Standards (Ind AS) by Banks, Insurance Companies and NBFCs – Effects of Transition and Potential Hurdles

[The following guest post is contributed by Arka Saha, who is a 4th Year B.A.LL.B. (Hons) & Executive Student in CS (ICSI) at National Law University Odisha (NLU-O)] To bring about systemic convergence of financial reporting standards in vogue in the case of Indian banking companies, Insurance companies and Non-banking Financial Companies with those recognised and accepted globally, the...

Whistleblowing and Confidentiality Agreements

Earlier this week, the US Securities and Exchange Commission (SEC) issued a settlement order in a case involving a company that required its employees to sign a confidentiality agreement when they were interviewed in internal investigations for allegations of potential violations of federal securities laws. The SEC decried the use of such confidentiality agreements as militating against laws that...

An Instance of Accounting Fraud

The New York Times analyzes an instance of possible accounting fraud at a Chinese company, Longtop Financial Technologies that has close similarities with India’s own Satyam scandal (i.e. improper confirmation of bank balances). While the Satyam scandal came into the public domain through a confession letter of the Chairman, in this case the auditor blew the whistle. Here is an extract: Deloitte...

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