[The following post is contributed by Nidhi Bothra of Vinod Kothari & Company. The author may be contacted at [email protected]] The financial crisis of 2007-08 led to several failed securitization transactions and brought in a storm of litigation in structured products.[1] Post the crisis, several bondholders sued the originators alleging misrepresentations on the quality of loans...
RBI Guidelines on Private Placement of Debentures by NBFCs – Part 2
[The following post is contributed by Nidhi Ladha and Vinita Nair of Vinod Kothari & Co. They can be contacted at [email protected] and [email protected] respectively. This is a continuation of a previous post accessible here] RBI Directions The present Guidelines From June 27, 2013 onwards, any issue of debentures- whether convertible or non convertible, by NBFCs – whether...
RBI Guidelines on Private Placement of Debentures by NBFCs – Part 1
[The following post is contributed by Nidhi Ladha and Vinita Nair of Vinod Kothari & Co. They can be contacted at [email protected] and [email protected] respectively] Non Banking Financial Companies (NBFCs) raise money through the issuance of capital/debt securities (including debentures) by way of public issue or private placement. Lately...
Foreign Investment in Debt Securities: Rationalization of Limits
With effect from April 1, 2013, the Government has rationalized the investment limits in debt securities for foreign institutional investors (FIIs) and other eligible investors such as qualified foreign investors, sovereign wealth funds, pension funds and the like. This has been implemented through circulars issued by SEBI (here) and RBI (here). Previously, FII investment in debt (both Government...
MCA Circular: Secured Corporate Debentures and Public Deposit Norms – Part 3
[The following is a guest post from Vinod Kothari and Nidhi Ladha of Vinod Kothari & Company. The authors can be contacted at [email protected] and [email protected] respectively. This is the final post in the series. The first two posts can be accessed here and here] Other laws affecting debentures Following are the other guidelines, rules or directions attracting issue...
MCA Circular: Secured Corporate Debentures and Public Deposit Norms – Part 2
[The following is a guest post from Vinod Kothari and Nidhi Ladha of Vinod Kothari & Company. The authors can be contacted at [email protected] and [email protected] respectively. This is a continuation from the first post in the series that can be accessed here] Meaning of ‘mortgage of fixed assets’ The significant difference between mortgage and charge is that mortgage is a...
MCA Circular: Secured Corporate Debentures and Public Deposit Norms – Part 1
[The following is a guest post from Vinod Kothari and Nidhi Ladha of Vinod Kothari & Company. The authors can be contacted at [email protected] and [email protected] respectively] The Ministry of Corporate Affairs, vide a notification dated 21st March 2013 (“Notification”), has made a change in Companies (Acceptance of Deposits) Rules 1975 (“Deposit Rules”). The apparent...
Listing of Preference Shares and Perpetual Securities
In its board meeting yesterday, SEBI announced that it would issue a new set of regulations governing the listing of non-convertible redeemable preference shares and perpetual securities. More than a decade ago, companies used the issue of preference shares as a mode of raising capital from the public, particularly because that did not result in a dilution in equity shareholding (and consequently...
Foreign Investment in Corporate Debt
[Vinita Sithapathy, who is a lawyer and a company secretary, has contributed the following post. Vinita graduated from Government Law College, Mumbai in 2008. She has advised clients on banking and finance and corporate M&A transactions since 2008. She can be contacted at [email protected]] Last month, the Reserve Bank of India (RBI) introduced some amendments to its existing regime...
Diaspora Bonds
The Economist has a piece that discusses the advantages of diaspora bonds to poor countries. It notes: The idea is simple. Poor-country governments can issue bonds and market them to emigrants in rich countries. There are several advantages to milking members of a diaspora. They are often patriotic: they like the idea that their savings will pay for bridges and clinics at home. They are patient...
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