TagCorporate Governance

The Ability of Promoters to Bid for their Own Companies in Insolvency

[Anupam Choudhary is an Associate at Agram Legal Consultants, a law firm based in Mumbai. The views and opinions expressed are those of the author and do not reflect the view of his firm nor do they constitute legal opinion] Recently, there has considerable debate over whether promoters of insolvent companies can submit bids in the bidding process for their own companies. Recently, the Essar...

The (Negligible) Role of Shareholders in Corporate Insolvency

The Ministry of Corporate Affairs (MCA) yesterday issued a clarification stating that no resolution or approval of the shareholders of a debtor company will be required in order to give effect to a resolution plan under the Insolvency and Bankruptcy Code, 2016 (IBC). It appears that stakeholders sought the MCA clarification on account of section 30(2)(e) of the IBC, which requires the resolution...

SEBI: Rules on Profit Sharing Arrangements Apply to Unlisted Subsidiaries

The rules introduced earlier this year by the Securities and Exchange Board of India (“SEBI”) that impose restrictions on profit sharing arrangements in respect of listed companies have already provoked interpretational controversies. In an earlier informal guidance (relating to Accelya Kale Solutions Limited), SEBI clarified profit sharing arrangements that involved employees being provided...

Report of the SEBI-Appointed Committee on Corporate Governance

In June this year, the Securities and Exchange Board of India (SEBI) appointed a committee under the chairmanship of Mr. Uday Kotak to review corporate governance norms in India, and to make recommendations to enhance governance standards. The committee comprised members from diverse fields. It issued its report on 5 October 2017. The report contains several significant recommendations. SEBI has...

Ascertaining Legal Ramifications of Compensation Agreements- Part III (In Search of Common Law Defences to Statutory Violations)

[The following post, the third in a series, has been contributed by Rahul Sibal, 4th year student of NALSAR Hyderabad. The first two posts in the series are available here and here.] In the previous post it was argued that section 166  of the Companies Act, 2013 (the ‘Act’), which partially codified the common law doctrines of no-conflict and no-profit, did not provide for consent-based...

NCLAT Ruling on Maintainability in the Tata Sons Case

Earlier this week, the National Company Law Tribunal (“NCLAT”) issued its ruling in Cyrus Investments Pvt Ltd v. Tata Sons Ltd on whether the Mistry group’s action for oppression and mismanagement in respect of Tata Sons is maintainable. Although the NCLAT ruled that the Mistry group’s petition did not meet the requirements of maintainability under section 244 of the Companies Act, 2013 (the...

Conversion of Tata Sons into a Private Limited Company: In Whose Interest?

The proposed conversion of Tata Sons Limited from a public limited company to a private limited company has reignited the corporate governance issues that the Tata Group has faced over the last year or so. Menaka Doshi has an interesting piece (and an accompanying interview with two corporate lawyers) in BloombergQuint that sets out some of the background to why Tata Sons proposes (and that too...

The Tata Corporate Governance Episode: The ‘India-Specific’ Issues and Concerns

[Guest post by Priya Garg, a 4th year law-student at West Bengal National University of Juridical Sciences (WBNUJS)] Introduction The recent turf battle within the Tata Group is likely to become a subject matter of study for various disciplines, including the subject of corporate law and governance.[1] The Tata-Mistry dispute giving rise to corporate governance issues needs to be considered...

SEBI Informal Guidance on Profit Sharing Arrangements

Last year, the Securities and Exchange Board of India (“SEBI”) clamped down on upside sharing arrangements between promoters or senior management of listed companies on the one hand and private equity investors on the other. Accordingly, the securities regulator amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “LODR Regulations”) to introduce regulation...

SAT Rejects Appeals in the United Spirits Case

We had earlier this year discussed SEBI’s ad-interim ex parte order in the United Spirits Limited (USL) case by which several persons (including Mr. Vijay Mallya) were prohibited from buying, selling or otherwise dealing in any securities, with some of them being restrained from holding positions as directors or key managerial personnel of any listed company. Against this, some of the persons...

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