Tag: Company Law
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Companies Bill Reintroduced in Parliament
Last October, the Companies Bill 2008 was introduced in Parliament with a view to simplify and modernize company law by replacing the Companies Act, 1956. However, the Companies Bill lapsed with the dissolution of the Lok Sabha earlier this year due to the general elections. In the meanwhile, corporate India witnessed the massive financial fraud…
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Corporate Opportunities: A “Scope of Business” Exception?
A couple of weeks ago, Corporate Law and Governance highlighted a decision of the Court of Appeal in O’Donell v. Shanahan, reasserting the strictness of a director’s fiduciary duties. A leading decision on the point of the director’s fiduciary duties was Regal (Hastings) v. Gulliver, [1942] 1 All ER 378, where the duties were held…
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Warrants and Voting
My friend Jayant Thakur posted a critique on July 31 on the recent SEBI Order in the case preferential allotment of warrants to promoters. Umakanth dealt with the element of potential prohibition of voting in areas of conflict of interest on August 1. Here is a piece I wrote in the Business Standard today, with…
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Shareholders and Their Duties under Indian Law
Under the Companies Act, 1956, shareholding in an Indian company is almost entirely associated with concepts like rights, entitlements and ownership. This emanates from Section 82, which reads as follows: The shares or debentures or other interest of any member in a company shall be movable property, transferable in the manner provided by the articles…
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Director and Officer Liability for Dishonour of Cheques
(The following post has been contributed by Avirup Bose. Avirup is an Indian lawyer, who has graduated from NUJS Kolkata and has an LL.M from the Harvard Law School) On July 6, a Division Bench of the Supreme Court passed a judgment in K.K. Ahuja v. V.K. Vora (MANU/SC/1111/2009, per R.V. Raveendran, J.) (“K.K. Ahuja”),…
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NCLT: Still Awaiting a Verdict
Although the establishment of the National Company Law Tribunal (NCLT) was envisaged through an amendment to the Companies Act nearly 7 years ago, it is yet to see the light of day. The NCLT is expected to take over the role of the High Court and the Company Law Board pertaining to various matters under…
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SEBI’s Recent Primary Market Reforms
SEBI last week announced a slew of reforms to the primary capital markets. The key reforms are as follows: Anchor InvestorsThe concept of “anchor investors” has been introduced in public issues whereby 30% of the institutional (QIB) portion will be allocated to anchor investors on a discretionary basis. This is to ensure minimum commitments from…
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Duties of the Official Liquidator: Madras HC decision
A recent judgment of the Madras High Court throws some light on the role of an Official Liquidator. In TCI Distribution Centers v. Official Liquidator (C.A. 1953/2008 in C.P. 526/2000), the Official Liquidator had sold certain properties through an auction-sale. The auction-purchaser later found out that the properties were not exactly the same as described…
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Electoral Verdict to Spur Reforms
With the return of the Congress government to power and with Dr. Manmohan Singh set to continue as Prime Minister, corporate India is likely to witness a series of reforms in the near future. Unlike the previous stint where the Government was hamstrung by coalition politics (but nevertheless achieving a record rate of economic growth),…
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A Call for Greater Shareholder Rights under U.S. Law
The proposed Shareholder Bill of Rights Act of 2009 in the U.S. that comes in the wake of the financial crisis gives rise to an important debate regarding the rights of shareholders in companies. The rationale for the Bill is the perceived failure of corporate governance that led to the crisis. It is worthwhile to…
