[The following guest post is contributed by Amitabh Robin Singh, who is an Associate at DSK Legal] The Securities and Exchange Board of India (“SEBI”) has recently issued a circular (“Circular”) which has allowed companies which have made deemed public offers (allotment of securities to more than 49 persons under the Companies Act, 1956) to escape penal action if the securities have not been...
What is a Foreign Company Under the Companies Act?
[This guest post is contributed by Ananya Banerjee, who is a Fifth year B.A.LLB(H) Student, Department of Law, University of Calcutta. The post relates to an interpretation of certain provisions of the Companies Act, 2013, and represents the view of the author, which have been backed up by arguments and reasoning. The possibility of alternative views and interpretation cannot be ruled out] This...
Supreme Court Resolves Conflict Between SARFAESI Act and Companies Act
In Pegasus Asset Reconstruction P. Ltd. v. Haryana Concast Ltd., the Supreme Court was concerned with a conflict between the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity ‘the SARFAESI Act’) on the one hand and the Companies Act, 1956 on the other. The specific conflict was identified as follows: Whether a Company Court, directly...
Obligation to give an exit to dissenting shareholders
[The following guest post is authored by by Bhargavi Zaveri, Prateek Misra, Sumant Prashant, Shefali Malhotra, who are researchers at the National Institute for Public Finance and Policy. An earlier version of this post was published on Ajay Shah’s Blog.] The Companies Act, 2013 (Act) obligates the promoters and majority shareholders of a listed company to buy-out dissenting shareholders...
Omnibus Approval of Related Party Transactions and Threshold for Fraud Reporting by Auditors
[The following guest post is contributed by Amitabh Robin Singh, who is an Associate at DSK Legal] With the notification bringing Sections 13 and 14 of the Companies (Amendment) Act, 2015 (“Amendment Act”) into force being published in the official gazette on December 15, 2015, we now have new provisions on the omnibus approval of related party transactions by companies. On a separate note, a...
Voting Rights on Preference Shares: An Unclear Provision?
[The following guest post is contributed by Vignesh Iyer of Vinod Kothari & Co. The author can be contacted at [email protected]] The enactment of the Companies Act, 2013 (Act, 2013) has given rise to various issues with regard to compliance and interpretations of several statutory provisions. One such issue is the subject matter of this post. Section 47 of Act, 2013 – Voting...
Winding-Up of a Foreign Company: Lessons from Hong Kong
[The following guest post is contributed by Suprotik Das, a 4th year law student at the Jindal Global Law School, Sonepat, Haryana.] This post seeks to address some developments with regard to the winding up of foreign companies and multiple derivative actions. On November 11, 2015, the Hong Kong Court of Final Appeal handed down a landmark decision in the case of Kam Leung Sui Kwan v...
Sale of an “Undertaking” in Company Law
[This post is contributed by Nitu Poddar of Vinod Kothari & Co. The author can be contacted at [email protected]] Company law imposes certain restrictions on the general powers of directors. Pursuant to section 180 of Companies Act, 2013 (“Act, 2013”), the board of directors of a company can exercise certain powers only with the consent of the members of the company by means of a special...
Nature of Consideration in a Scheme of Arrangement
[The following guest post is contributed by Rushab Dhandokia, who is an associate at a reputed law firm. Views are personal] Background The Bombay High Court in re Thomas Cook Insurance Services (India) Limited[1] has dealt with a very interesting question within the domain of Mergers & Acquisitions (“M&A”). The case refers to the sanction of a composite scheme of arrangement and...
The Differential Dividend Story
[The following guest post is contributed by Siddharth Raja, Founding Partner of Samvad Partners. Views are personal.] A previous post on this Blog raises some interesting questions – although this author believes that analysis is both incomplete and, indeed, not purely academic. While the above blog post only addressed one aspect of the issue, the larger question is this: whether a dividend...
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