Tag: Company Law
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Reforming Indian Company Law
After a prolonged wait, far-reaching reforms are finally underway in relation to the Companies Act, 1956. The Union Cabinet yesterday gave its approval to the Companies Bill, 2008 which is set to introduce a comprehensive revision of the Companies Act. Though the Companies Act (enacted in 1956) essentially tracked the then existing English company law,…
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Official Liquidator and Misfeasance Proceedings
(The following post has been contributed by V. Niranjan) Under s. 457 of the Companies Act, a liquidator has wide powers to ensure fair and equitable distribution of its assets. These powers are general in nature, and their scope and extent are well known. In addition, the Official Liquidator also has the power to compel…
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Stock Options for Nominee Directors
Nominee directors on Indian corporate boards are a unique category of directors. They are usually are nominated by a bank, financial institution or other large investor to be a director on companies in which such nominating entities have invested. Sometimes, nominee directors also find themselves in an unenviable position – in case of a conflict…
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Supreme Court on Winding-up Petition by a Contributory
Usually, in a merger, the resulting company becomes entitled to all the rights (and subject to all the liabilities) of the merging company. This includes the exercise of rights in respect of shares in other companies (which we shall call target companies) held by the merging company, as the resulting company would become the owner…
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Liquidation Preference: How Effective is it?
In a column in the Economic Times, Amrita Singh and Siddharth Shah discuss the relevance of the concept of liquidation preference in Indian investment transactions: “The progressive liberalisation of the foreign investment regime has provided a major boost to private equity and venture capital investments in Indian companies. With the advent of more sophisticated players…
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Share Buyback: The Effect of Shareholders’ Resolution
In a recent case decided last week, the Securities Appellate Tribunal (SAT) had the occasion to decide on the effect of a shareholders’ resolution in the context of a buyback of shares. The SAT decision is available here. The facts of the case are fairly straightforward. The company involved, D-Link India Ltd, proposed to the…
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Management Buyouts (MBOs): Possibilities and Challenges
Earlier this week, The Hindu Business Line carried a detailed column on various business and financial aspects of management buyouts (MBOs), particularly as such deals are being witnessed (albeit infrequently) in India. Simply stated, management buyouts involve the acquisition of a division of a company or the shares in a company, in each case by…
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Differential Voting Rights: Some Further References
In earlier posts (here and here), this Blog had covered the issue of differential voting rights by Indian companies. A recent column by Srikanth Srinivas in the Business World examines the business rationale for the issuance of shares with differential voting rights and also the pros and cons of such instruments. The key objectives that…
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Differential Voting Rights: A Markets Perspective
Economic Times carries the views and recommendations of various market participants about the feasibility and economics of issue of differential voting rights by Indian companies. One interviewee notes: “Differential voting rights can work every where in the world, and so also in India. These are ideally good instruments for passive investors, typically small investors, who…
