Last week’s Schumpeter column in the Economist carries a provocative idea that involves a complete relook at the way boards of companies are structured and operated. It borrows a proposal from an article titled “Boards-R-Us: Reconceptualizing Corporate Boards” authored by two leading US corporate law academics. The column summarizes the proposal as follows: In the May edition of the Stanford Law...
OECD Report on Related Party Transactions in India
The topic of related party transactions (RPTs) has acquired tremendous importance lately and has been the subject matter of intense discussion and debate both on this Blog (here) and elsewhere (here, here and here). The discussions focus on the specifics and the interpretation of the Companies Act and the Rules promulgated by the Ministry of Corporate Affairs (MCA) that deal with RPTs. In the...
Guest Post – MCA amends RPT rules: Makes provisions stricter
[The following post is contributed by Vinod Kothari and Shampita Das of Vinod Kothari & Company. They can be contacted respectively at [email protected] and [email protected]] The latest setback from the MCA has come by way of the amendments to the Companies (Meetings of Board and its Powers) Rules, 2014 (MBP Rules) vide its notification dated 14th August, 2014, which is yet to...
Paper on Squeeze Outs in India
Professor Vikramaditya Khanna and I have co-authored a working paper titled “Regulating Squeeze Outs in India: A Comparative Perspective” that is now available on SSRN. The abstract is as follows: Squeeze outs are both visible and palpable manifestations of a controlling shareholder’s raw power within the corporate machinery – the ability to openly force minority shareholders to exit the company...
Guest Post: Corporate Law Reforms and Whistleblowing
[The following post is contributed by Suprotik Das, a 3rd year law student at the Jindal Global Law School, Sonepat, Haryana] Last year, with the advent of the Companies Act, 2013 (the Act), the thrust has been toward fraud protection and having an effective corporate vigil mechanism. Companies in India are now required to have an appropriate whistle blower protection policy in place. In this...
Legislative & Regulatory Initiatives in Corporate Governance
Prof. N. Balasubramanian has a new research paper titled Strengthening Corporate Governance in India: A Review of Legislative and Regulatory Initiatives in 2013-2014 that is available on SSRN. The abstract is as follows: The passing of the long awaited Companies Act in 2013 is probably the single most important development in India’s history of corporate legislation, next only to the monumental...
Guest Post: MCA Circular on Related Party Transactions
[The following post is contributed by Vinod Kothari and Shampita Das of Vinod Kothari & Co. They can be contacted at [email protected] and [email protected] respectively] The Ministry of Corporate Affairs (MCA) drives what corporate India will do, or will not do, or will do with rudders and rigours, under the new Companies Act 2013. It was the 30th of the Circulars issued under...
SEBI Order in the Satyam Case
Facts and Sanctions Yesterday, more than five years after the Satyam ex-chairman’s much talked about revelations, SEBI passed an order in the case against five individuals, being the ex-chairman, ex-managing director, ex-Chief Financial Officer, ex-Vice President Finance and ex-Head (Internal Audit). In the 65-page order, SEBI considers the various acts of these individuals in detail that include...
Guest Post: MCA Finalises Cost Audit Rules
[The following post is contributed by Nivedita Shankar of Vinod Kothari & Company. She can be reached at [email protected]] Putting all speculation to rest, the Ministry of Corporate Affairs (MCA) on June 30, 2014 finally came out with the final rules relating to cost audit and cost records. Although, the rules are yet to be gazetted, yet the finalized rules have surely given an...
Guest Post: MCA notification on Audit Committee
[The following post is co-authored by Yogesh Chande and Manendra Singh. Yogesh is an Associate Partner and Manendra is an Associate with ELP. Views of the authors are personal.] In terms of section 177(1) of the Companies Act, 2013 (Act) read with rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 (Rules), following companies are required to constitute an audit committee:...
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