[Bharat Vasani is Senior Advisor – Corporate Laws and Ayush Lahoti an Associate in the General Corporate Practice, both at the Mumbai office of Cyril Amarchand Mangaldas. An earlier version of this post was published on the Cyril Amarchand Mangaldas Blog] Shareholder meetings form the bedrock of shareholder democracy in a corporate institution. They provide shareholders with the opportunity to...
Unpacking NCLT Kolkata’s Reversal on Capital Reduction in the Philips India Case
[Shalin Ghosh is a 3rd year B.A., LL.B. (Hons.) student at Maharashtra National Law University, Mumbai] Capital reduction is a common mode of financial restructuring for a company. It is a useful tool for companies to reduce accumulated losses and achieve an optimal capital structure. Organizationally, it is a popular route to provide an exit to minority or dissenting shareholders from a company...
NCLT’s Shift: A Deeper Dive into Merger Schemes and Public Interest
[Arjim Jain and Shruti Asati are 4th Year B.A., LL.B. (Hons.) students at National Law University, Odisha] In a ruling in July, the National Company Law Tribunal (‘NCLT/Tribunal’) rejected a proposed merger scheme involving three interconnected entities, citing concerns that the scheme was not in the public interest. Unlike other cases where the NCLT typically focused on ensuring compliance with...
Identifying the Real SBO: A critique of the LinkedIn and Samsung Orders
[Chirag Motwani and Ananya Badaya are 4th year law students at Hidayatullah National Law University, Raipur] A “significant beneficial owner” (“SBO”) is an individual who directly or indirectly controls a company or substantially holds beneficial interest in the company and whose name is not registered as a holder of shares in the books of the company. Section 90 of the Companies Act, 2013...
Protection against Self-incrimination and Section 217 of the Companies Act, 2013: Navigating Constitutional Waters
[Shriya Chakravarthy and Mrigank Pathak are alumni of Gujarat National Law University, Gandhinagar, and have previously served as Law Clerks at the Supreme Court of India. They are presently practising at the High Court of Karnataka and the Supreme Court of India respectively] Under the Companies Act, 2013 (“the Act”), the procedures for inspection, inquiry, and investigation have been laid down...
Managerial Remuneration – Should Promoters Be Disenfranchised?
[Bharat Vasani is Senior Advisor – Corporate Laws and Miloni Mau an Associate in the General Corporate Practice, both at the Mumbai office of Cyril Amarchand Mangaldas. An earlier version of this post was published on the Cyril Amarchand Mangaldas Blog] The Government of India’s socialistic approach towards controlling managerial remuneration between 1960s and 1990s has been a painful chapter in...
When a Rights Issue becomes Oppressive: A Look at Byju’s Recent Controversy
[Rituraj Singh Parmar and Priyam Indurkhya are 4th year B.A., LL.B. (Hons.) students at National Law Institute University, Bhopal] Think & Learn Private Limited, popularly known as Byju’s, has been facing several legal battles nationwide. In February 2024, the investors of Byju’s filed a petition for oppression and mismanagement with the National Company Law Tribunal, Bengaluru (“NCLT”). The...
Indian Shareholder Activism: Approaching a Turning Point?
[Karan Anand and Bhaskar Vishwajeet are students at Jindal Global Law School] The unsuccessful merger between Zee Entertainment Enterprises Limited (“ZEEL”) and Culver Max Entertainment Private Limited (“SPNI”) has reignited the debate on the status of shareholder activism in incomplete mergers in India. In the wake of the termination of the merger, some of SPNI’s institutional shareholders...
Crowdsourcing Capital Faces Stiff Penal Actions
[Pammy Jaiswal is a Partner at Vinod Kothari and Company] Several well-known digital platforms have been showcasing the immense potential to raise funds for start-ups from private equity investors, reaching very often to retail investors too. However, one needs to note the provisions of section 42 (7) of the Companies Act, 2013 (‘CA 2013’), and several recent penalty orders which, with detailed...
Calcutta High Court on Jurisdiction in Shareholder Disputes under Companies Act: An Aberration?
[Abhijnan Jha is a Partner and Urvashi Misra a Senior Associate at AZB & Partners, New Delhi] It is trite law that where a statute prescribes something to be done in a particular manner, then it ought to be done in that manner alone and not in any other manner. This is a well-recognized position, with courts having the duty to filter out any misguided attempts by litigants to bypass statutory...
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