In the ongoing saga involving the boardroom battle for the Tata Group, a new development may have significant implications for corporate governance practice in India. Yesterday, a Tata Group company, The Indian Hotels Company Limited (IHCL) notified the stock exchanges of a meeting held among the independent directors of the company. It stated: Taking into account Board assessments and...
The Tata Sons Imbroglio: Whither Corporate Governance?
Much ink has already been spilt over the last three days following the revelation that the chairman of the Tata Sons board, Mr. Cyrus Mistry, has been “replaced”, and that Mr. Ratan Tata has returned to helm the affairs as interim chairman for a period of four months until a successor can be found. This has not only sent the sprawling corporate group into crisis mode, but it has led to...
Companies Mediation and Conciliation Rules: An Update
[The following post is contributed by Bhushan Shah and Neha Lakshman from Mansukhlal Hiralal & Company. The views expressed are personal] Section 442 of the Companies Act, 2013 (‘Act’) empowers the Central Government to constitute a panel of experts to mediate and settle disputes pending before the National Company Law Tribunal (‘NCLT’), National Company Law Appellate Tribunal...
NCLT: Revolutionizing the Realm of Corporate Litigation
[The following post is contributed by Shruti Khetan, who is a student at the West Bengal National University of Juridical Sciences] After a decade-long wait, the National Company Law Tribunal (‘NCLT’) and its appellate body, the National Company Law Appellate Tribunal (‘NCLAT’) have finally been constituted under sections 408 and 410 of the Companies Act, 2013 (‘Act’) with effect from June 1...
Ruling on Shareholder Rights to Inspect Company Records
[The following guest post is contributed by Dheeraj Kumar Sharma, who is a Manager at Vinod Kothari & Company] Introduction The Mumbai Bench of the Company Law Board (‘CLB’), through its order dated April 16, 2015 in the case of Mr. Anil Kumar Poddar v. Bonanza Industries Limited, dismissed the application of a shareholder who demanded copies of records of a company and sought inspection of...
Paper on Directors’ Duties and Stakeholder Interests
Mihir Naniwadekar and I have a working paper on SSRN titled “The Stakeholder Approach Towards Directors’ Duties Under Indian Company Law: A Comparative Analysis”, the abstract of which is as follows: Recognizing that common law does not cast any general duty upon directors towards non-shareholder constituencies, legislatures have sought to formulate a tolerable solution to what they perceive as a...
Liberalized Regime for Issuance of Masala Bonds
An attractive option for Indian companies raising finances is to issue rupee-denominated bonds to persons residing outside India. Popularly known as “masala bonds”, some of these may even be listed on foreign stock exchanges. Naturally, the legal regime governing these bonds, particularly from the purview of corporate law, securities regulation and foreign exchange laws is of relevance. Over a...
Amendments to the Companies Incorporation Rules
[The following guest post is contributed by Bhushan Shah and Neha Lakshman from Mansukhlal Hiralal & Company. The views expressed in the article are personal.] The Ministry of Corporate Affairs (MCA) has notified the Companies Incorporation (Third Amendment) Rules, 2016 by way of a notification in the official gazette on 27 July 2016. This update captures some of the important changes brought...
Bonus Debentures: A New Perspective on Certain Issues and Concerns
[The following post is contributed by Priya Garg, who is a student at the West Bengal National University of Juridical Sciences (WB-NUJS). An earlier post on this Blog discussing the features and implications of bonus debentures is available here.] Bonus debentures are those debentures which a company issues to its shareholders by using its reserves’ balance. Their issue does not require cash...
Supreme Court Resolves Conflict Between Companies Act and SICA
[The following guest post is contributed by Aditi Jhunjhunwala, who is a partner at Vinod Kothari & Co. The author can be contacted at [email protected].] In a recent ruling in the case of Madura Coats Limited v. Modi Rubber Ltd. & Anr., the question before the Supreme Court on appeal was: where an order for winding up is passed under the Companies Act and the company has made a...
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