Bar & Bench yesterday reported that the Bombay High Court denied leave to certain shareholders of various Tata group companies to bring a representative suit that made certain legal claims in the aftermath of the ouster of Mr. Cyrus Mistry from the board of Tata Sons as well as other Tata group companies. The order of the court in Pramod Premchand Shah v. Rata Tata is now available. Facts and...
A Closer Look at the Cross-Border Mergers Regime in India
[Post by Suprotik Das, a 5th year law student at the Jindal Global Law School, Sonepat, Haryana.] April 13, 2017 marked a momentous event in the cross-border merger regime in India with the Ministry of Corporate Affairs notifying section 234 of the Companies Act, 2013 as well as amendments to the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 in the form of Rule 25A. Read...
Geotagging: A New Way to Track Charged Assets
[Post by Rohit Sharma, who is an Executive at Vinod Kothari & Co. He can be reached at [email protected].] Notification The Ministry of Corporate Affairs (MCA) issued a notification dated 7 April 2017 introducing a new way to track down tangible assets on which charge has been created and registered with the Registrar of Companies (RoC). This is to be accomplished by geotagging the...
Co-existence of Winding-up Petition and Application under Insolvency Code
[The following post is contributed by Nitu Poddar, who is an Associate at Vinod Kothari & Co, and can be reached at [email protected]] This post seeks to address the question whether an application for resolution process of a company can be filed under the Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in case a winding up petition is pending before a High Court? MCA...
Transfer of Shares to the Investor Education and Protection Fund (IEPF)
[The following post is contributed by Pammy Jaiswal, who is an Associate at Vinod Kothari & Co, and can be reached at [email protected]] Introduction By way of its notification dated 28 February 2017, the Ministry of Corporate Affairs (MCA) had tried to simplify the procedure for transferring shares to the Investor Education and Protection Fund (IEPF) Authority. In doing so, it had left...
Companies Act, 2013: Cross-Border Merger Provisions Notified
Under the previous Companies, Act, 1956 (sections 391-394) it was possible for a foreign company to merge with an Indian company, but an Indian company could not be merged with a foreign company. This was intended to ensure that the company that continues after the merger is an Indian company over which the Indian regulatory authorities continue to exercise control. This position was also...
The MCA’s Drive Against Non-Operative Companies
[Guest post by Dheeraj Kumar Sharma, who is an Associate at Vinod Kothari & Co.] Introduction The discussion on the existence of non-operative companies is garnering the attention of the corporate sector with special emphasis from various regulatory arms in addressing issues pertaining to such companies. The Government had clearly indicated that actions will be initiated against companies...
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...
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...
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)...
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