[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:...
Director Liability Under the New Regime
Types of Liability Being fiduciaries, directors are exposed to liabilities as a consequence of a breach of their duties. While liabilities may arise under various statutes, the focus here is on liabilities arising under company law. The first set of liabilities is statutory in nature, being specifically set forth in the Companies Act, 2013 (the 2013 Act). These could be either civil liability...
Directors’ Actions: For Whose Benefit?
It is clear that directors ought to act in good faith for the benefit of the company. Since the company is a separate legal personality, there is often the question as to who represents the interests of the company. Generally, the interests of the company are said to equate with the interests of the shareholders, while in the case of an insolvent company (or one that is in the zone of insolvency)...
Report on Governance of Banks
Historically, the governance of banks has received greater (and somewhat different) attention when compared to governance of companies carrying on other forms of business. This is because banks deal with depositors’ funds and their actions or misdeeds can cause a more severe strain on the economy as a whole. Hence, while banks that are established as companies (and listed on the stock exchanges)...
Court-Convened Meetings and Postal Ballot
Background In one of the first few cases interpreting the provisions of the Companies Act, 2013 (the 2013 Act), the Bombay High Court last week issued its judgment on the use of postal ballot facility at a court-convened meeting to consider a scheme of arrangement. In re Godrej Industries Limited, the court was concerned with a scheme of amalgamation of Wadala Commodities Limited into Godrej...
SEBI Announces the Specifics of Revised Corporate Governance Norms
It was nearly a decade ago in October 2004 that the Securities and Exchange Board of India (SEBI) announced substantial revisions to the corporate governance norms contained in clause 49 of the listing agreement that applies to all public companies listed on an Indian stock exchange. The revisions, however, took effect only from January 1, 2006. Since then, there have been some specific...
A Study on Ownership Concentration in Indian Companies
The shareholding pattern of Indian companies has been the subject matter of academic studies, which have consistently shown that Indian companies are controlled substantially by controlling shareholders (or promoters) who hold a significant percentage of shares in public listed companies. The promoters range from business families to the state and to multinational corporations (MNCs). For a...
Recent Comments