The NSE Centre for Excellence in Corporate Governance (CECG) has issued its most recent quarterly briefing titled Stakeholder Responsibility of Corporate Boards, which has been authored by Mihir Naniwadekar and myself. The executive summary is as follows: – The interests of stakeholders (besides shareholders) have become quite prominent to necessitate their recognition by corporate boards;...
SEBI’s Order against PwC: A Questionable Approach towards Mens Rea
[Sanchit Varma is a 4th year BA.LL.B (Hons) student at NALSAR University of Law, Hyderabad] The nearly decade-old Satyam controversy has left a lasting impact on the Indian corporate sphere, raising dormant issues of corporate governance and the need for stricter regulatory control over listed entities. The fallout from the scam especially affected Satyam’s auditors, who were hauled up in equal...
Companies (Amendment) Act, 2017: Loans to Directors
[Utsav Mitra is a 3rd year, B.A. LLB Hons student at The National Law Institute University, Bhopal] The granting of loans to, and security and guarantees provided on behalf of, directors and other interested parties of the directors is governed by section 185 of the Companies Act, 2013. However, this is a widely criticised section, being too prohibitive in nature as compared to the corresponding...
More on SEBI’s Order in the Price Waterhouse Case
In an earlier post, Jayant Thakur had discussed the order of the Securities and Exchange Board of India (SEBI) passed against Price Waterhouse last week. In addition, readers may find the following two further pieces on the legalities of the SEBI order of relevance: In a column titled “SEBI’s ban onPwC:Learnings for an auditor” in Bar & Bench, Kanwardeep Singh examines SEBI’s...
Revisiting Arbitrability of Claims of Oppression and Mismanagement: A Singapore Perspective
[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...
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