Since a scheme of arrangement, once sanctioned, becomes binding on all shareholders and creditors a company and also has wider impact, company law prescribes a stringent process for the same. One such is the requirement that the court must issue notice to the Central Government under section 394-A of the Companies Act, 1956 and take into consideration any representations that the Government may...
BNP Paribas v UB Holdings: The Karnataka High Court on s 536(2)
In its recent judgment in BNP Paribas v UB Holdings, a Division Bench of the Karnataka High Court has considered an important question of insolvency law. The case has been widely reported in the press, of course, for it set aside a sale of shares to Diageo and made some observations about parallel transactions. But it is important to note that all of the High Court’s comments on the merits of the...
Guest Post: Section 62 (1)(c) of Companies Act, 2013 and Liberty of Capital Raising by Companies
[The following is a guest post from Vinod Kothari of Vinod Kothari & Co. He can be contacted at [email protected]] Closer to the gradual implementation of the 2013 Act, one gets an ever firmer feeling that the drafting of the law became highly superficial, and the twin Parliamentary committees merely went on the basis of innate assurances that MCA would do what is required to resolve all...
Guest Post: Issue of Capital by Private Companies under the Companies Act, 2013
[The following post is contributed by Yashesh Ashar. Yashesh is a tax and regulatory consultant and the views expressed herein are personal] The Companies Act, 2013 (‘New Cos Act’) which received the assent of the President on 30 August 2013 seeks to create a major overhaul in the functioning of the corporates in India. A major part of the New Cos Act is to be governed by the Rules proposed to be...
Guest Post: New Regime of Corporate Governance: Heading Towards “Hung” Companies – Part 2
[The following post is contributed by The following post is contributed by Nivedita Shankar, who is a Senior Associate at Vinod Kothari & Co. She can be reached at [email protected]. The views expressed herein are solely those of the guest author and cannot be ascribed to the other contributors of this Blog. This is a continuation from the previous post in this series] Precedents...
Guest Post: New Regime of Corporate Governance: Heading Towards “Hung” Companies – Part 1
[The following post is contributed by The following post is contributed by Nivedita Shankar, who is a Senior Associate at Vinod Kothari & Co. She can be reached at [email protected]. The views expressed herein are solely those of the guest author and cannot be ascribed to the other contributors of this Blog] The OECD in its report titled “Guide on Fighting Abusive Related Party...
Clarification on Effectiveness of the Companies Act, 2013
In a previous post concerning the notification bringing into effect several provisions of the Companies Act, 2013, it was discussed that the provision repealing the respective provisions of the Companies Act, 1956 was not brought into effect causing some confusion as to which law will apply to those matters. Based on requests for clarification seemingly made by several parties, the Ministry of...
Companies Act, 2013: Additional Disclosures in Notices of Meetings
[The following post is contributed by Nidhi Ladha, who is a junior partner at Vinod Kothari & Co. She can be reached at [email protected]] The Companies Act, 2013 (the Act) has already been enacted as Act no. 18 of 2013 after obtaining the assent of the President on August 29, 2013. The Ministry of Corporate Affairs (MCA) has placed on its website the draft rules for public comments...
Remedies against Directors’ Undue Gains: Personal or Proprietary?
What is the appropriate remedy against a director who makes secret profits? Should the remedy be merely a personal one, or should it be a proprietary one? This issue is one of great importance and several jurisdictions have been debating the issue for years now. The rules against conflict and profit are at the core of a director’s duties; and it is essential for a legal system to provide a...
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