[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...
Corporate Governance and Sustainability
Professor Vikramaditya Khanna has authored the latest edition of the NSE Quarterly Briefing titled “Global Asset Managers and the Rise of Long Term Sustainable Value”. The executive summary is as follows: – The largest global asset managers (e.g., BlackRock, State Street) have stated that long term sustainable value (LTSV) is their key goal with respect to the firms in which they invest...
The IL&FS Crisis: Lessons in Governance
The situation involving the Infrastructure Leasing and Financial Services Limited (IL&FS) has raised a number of questions revolving around corporate governance. Are governance failures to blame for the predicament in which the company finds itself? A lot has been said about the role of independent directors, nominee directors, auditors and credit rating agencies. However, one aspect that is...
The Influence of Foreign Investors and Proxy Advisory Firms on Corporate Governance
Institutional investors have begun taking an active role in companies that have dispersed shareholding. This played out demonstrably in the case of HDFC in July when the chairman Mr. Deepak Parekh retained his position in the company by a narrow margin. This was attributable to a number of foreign institutional investors having voted against his continuation in the company. They did so on the...
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