Tag: Company Law
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Supreme Court on Section 394: Sesa v. Krishna Bajaj
The Supreme Court of India recently revisited the law on schemes of amalgamation under Sections 391-394 of the Companies Act, 1956 in Sesa Industries v. Krishna Bajaj. The Supreme Court was concerned with a set of appeals by special leave from the judgment of a Division Bench of the Bombay High Court at Panaji. The…
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Managerial Remuneration in Unlisted Companies: Process Eased
When the rest of the world is tightening the screws on payment of managerial remuneration in the wake of the financial crisis, the Ministry of Corporate Affairs (MCA) in India has eased the process for such payments in the case of unlisted companies. However, this is certainly understandable. The erstwhile process of requiring even unlisted…
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The Concept of an “Interested” Shareholder
Yesterday’s board meeting at SEBI was not expected to generate any substantial decision owing to the impending change of guard at the regulatory institution. True to expectations, key matters such as amendment to the Takeover Regulations and implementation of the Jalan committee report on stock exchanges and other market infrastructure institutions were deferred. However, SEBI…
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Corporate Structure for Foreign Banks in India
Historically, the RBI appears to have had a preference for allowing foreign banks to operate in India as branches rather than separately incorporated subsidiaries. Consequently, most (if not all) foreign banks have been established as branches for the purposes of banking law as well as company law. Apart from the fact that a branch enjoys…
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Balco Arbitration Award: Section 111A of the Companies Act
A CNBC-TV 18 report and interview indicate that an arbitration panel has rejected Sterlite’s right to acquire the balance 49% in Balco by way of exercise of a call option. The report states: The arbitration panel comprised of two former chief justices of India and a third senior judge. When Sterlite acquired Balco’s 51% stake…
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The Red Jaguar: Apparent Authority and Tortious Liability
Ironically, many significant propositions in private law have been advanced in the course of a court’s attempt to unravel a transaction or scheme engineered by a rogue with considerable ingenuity – so much so that judges not infrequently ask the question “which of two innocent parties should bear the loss caused by a rogue” (See,…
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Shareholders Agreements: Clauses and Enforceability
Shareholders agreements are contracts among shareholders of a company (to which the company is also usually a party) that confer rights and impose obligations over and above those provided by company law. The agreements provide for matters such as restrictions on transfer of shares (right of first refusal, right of first offer), forced transfers of…
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Progress Property Affirmed: Unlawful Distribution of Capital
“The rule is essentially a judge-made rule, almost as old as company law itself, derived from the fundamental principles embodied in the statutes by which Parliament has permitted companies to be incorporated with limited liability.” So said Lord Walker last week in delivering the judgment of the United Kingdom Supreme Court in Progress Property v…
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Proxies for Shareholders; Alternates for Directors
A column in today’s Business Line by S. Murlidharan analyzes the appointment of proxies by shareholders to attend general meetings as compared to the appointment of alternate directors on the board. Although the author alludes to the “shareholder’s proxy” and “director’s proxy” (the latter being the alternate director), he highlights the all-important difference between the…
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Companies Bill to be Deferred
A few weeks ago, newspaper reports had suggested that the Companies Bill, 2009 may be presented in amended form during the winter session of Parliament and that it may even be enacted by the end of the year. That was somewhat intriguing considering the magnitude of the discussions before the Parliamentary Standing Committee on Finance…
