TagCorporate Governance

SEBI Committee on Regulating Proxy Advisors

Over the last decade, India has witnessed considerable shareholder activism in that shareholders, particularly institutions, have become more active in exercising their corporate franchise. Proxy advisory firms have formed an integral part of this movement, as they provide advice to both institutional and individual shareholders on how they may exercise votes at shareholder meetings of companies...

Shareholding Patterns and Director’s Duty of Loyalty: Comparative Analysis of India and the US

[Ishani Mookherjee is a 3rd year B.A. LLB (Hons.) student at Jindal Global Law School] The Delaware Supreme Court, in Cede v. Technicolor Inc., examined the applicability of the business judgment rule in the United States (US). For a business decision to be protected by this rule, two conditions have to be satisfied – the duty of loyalty and the duty of reasonable care. This creates a...

SEBI’s DVRs Framework: How Will the Indian Market React to a Super Voting Stock Structure?

[Sarthak Sharma and Aabha Dixit are 3rd year and 4th year students respectively at Hidayatullah National Law University, Raipur] The Securities and Exchange Board of India (SEBI) on 27 June 2019, after much deliberation, approved the issuance of shares with differential voting rights (DVRs) and issued a framework governing issuance and listing of shares with DVRs. Prior to this, whilst issuance...

Lessons from L&T’s Takeover of Mindtree: Can Differential Voting Rights Aid Promoters in Peril?

[Rongeet Poddar is a final year B.A. LLB (Hons.) student at West Bengal National University of Juridical Sciences] A hostile takeover is a rare occurrence in the Indian market because of the stringent control of promoter-families over companies and concentrated shareholding patterns in India. L&T’s hostile takeoever of IT services firm Mindtree however is an exception to this general trend...

The Enforceability of Investor Rights in Indian Private Equity

[Arjya B. Majumdar is an Associate Professor at Jindal Global Law School] Globally, private equity (PE) and venture capital funds are among the primary factors supporting entrepreneurship and furthering growth in companies. These investments are ordinarily made in exchange against some form of minority shareholding in the investee company, such as equity shares or convertible preference shares or...

The Binani Cements Case: Internal Governance at the Stage of Insolvency Resolution

[Priya Garg is a 5th year student at West Bengal National University of Juridical Sciences (WBNUJS), Kolkata] In this post, I view the Binani Cement case from the lens of an organisational governance enthusiast. I thereby highlight the lacuna that exist under the Insolvency and Bankruptcy Code, 2016 (IBC) towards ensuring that good internal governance practices are followed at the stage of...

Recent Developments Pertaining to Independent Directors

Professor Bala N. Balasubramanian has authored the latest edition of the NSE Quarterly Briefing titled “Caution: Independent Directors – Hairpin Turns Ahead!”. The abstract/introduction is as follows: The institution of Independent Directors (D), heralded as a virtual panacea for all governance ills, nearly three decades ago in the UK’s Cadbury prescriptions, is now almost universally under...

Supreme Court Enhances Information Rights of Directors in Insolvency Process

In Vijay Kumar Jain v. Standard Chartered Bank (decided on 31 January 2019), the Supreme Court was concerned with the question whether under the Insolvency and Bankruptcy Code, 2016 the resolution professional is obligated to provide to members of the suspended board of directors all relevant documents pertaining to the corporate insolvency resolution process, including the resolution plan. The...

ESG Reporting in India

The NSE Centre for Excellence in Corporate Governance (CECG) has issued its most recent quarterly briefing titled “Environmental and Social Reporting by Indian Companies”, which I have authored. The executive summary is as follows: Recent years have witnessed a strong focus on long-term sustainable value in companies rather than short-term profitability. The need for greater transparency on...

The (Ambiguous) Position of Chairman Emeritus in Corporate Governance

[Priya Garg is a 5th year student at West Bengal National University of Juridical Sciences (WBNUJS), Kolkata] When Ratan Tata, the then Chairman Emeritus of the Tata Group of companies, allegedly exercised his influence over the Group’s directors to dethrone its then Chairman, Cyrus Mistry, because of the former’s dissatisfaction with the latter’s functioning,[1] a new corporate governance issue...

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