[Aishwarya Singh is a 4th year student at Jindal Global Law School] The Bombay High Court (HC) in the case of Rakesh Malhotra v. Rajinder Kumar Malhotra (2014) had held that oppression and mismanagement claims are not arbitrable because the arbitral tribunal does not have the power to grant all the statutory reliefs available in a minority oppression claim. On the other hand, the Singapore Court...
Can a Company ‘Selectively’ Reduce its Capital?
[Shikha Rawal is an Associate at a law firm in Mumbai. The views in this post are personal.] Over the years, several companies have increasingly resorted to selective capital reduction as a means of share capital management. A reduction of capital often involves the reduction of the same proportion of the shares of the company on similar terms and conditions offered to each shareholder whose...
Sharing of Unpublished Price Sensitive Information with Promoters
[Shikha Rawal is an Associate at a law firm in Mumbai. The views in this post are personal.] In June this year, the Securities and Exchange Board of India (“SEBI”) constituted a committee under the Chairmanship of Mr. Uday Kotak (“Kotak Committee”) to propose reforms to regulations governing listed companies. After careful deliberations, the Kotak Committee submitted a report on October 5, 2017...
Majority Requirement for Creditors’ Approval of Resolution Plan
Background and Legal Question Nearly all of the posts on this Blog that deal with the Insolvency and Bankruptcy Code, 2016 (the “Code”) begin with the quip that the Code is still undergoing a gestation period that has led to snags in its implementation. This one is no different. Two separate benches of the National Company Law Tribunal (“NCLT”) have adopted diametrically opposing views on the...
Proxy Holders and Corporate Representatives: The Obligation to Vote According to Instructions
[Job Michael Mathew is a 4th year BA.LL.B (Hons) student at NALSAR University of Law. He may be reached at [email protected]] This post examines the question whether proxyholders appointed under section 105 of Companies Act, 2013 (the “Act”) and corporate representatives appointed under section 113 are required to vote according to the specific instructions given to them by their appointers...
Survey on Succession Planning in Indian Companies
Historically, the issue of succession planning has received scant attention from a policy perspective in the corporate governance debates in India. More recently, however, succession planning has played a key role in corporate governance episodes such as Tata Sons and Infosys, thereby highlighting the importance of the concept. Regulators and policymakers have begun to place emphasis on...
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...
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