TagDirectors

The Companies Amendment Bill, 2017: Proposed Changes to Section 185

[Guest post by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai] With the Companies Amendment Bill, 2017 (“Amendment“) being passed by the Lok Sabha and sent to the Rajya Sabha, it would be pertinent to discuss one of the major changes proposed by the Amendment. The Amendment proposes to completely replace Section 185 of the Companies Act, 2013 (“2013...

Activism through Directors Elected by “Small Shareholders”

Recent news reports (here, here and here) have highlighted a shareholder proposal that has been initiated in preparation for the annual general meeting of Alembic Limited to be held on 28 July 2017. The shareholder in question is Unifi Capital Private Limited who is said (though not verified) to be holding 3% shares in Alembic. The proposal involves the election of a “small shareholder” director...

Minimizing the Liability of Directors: SEBI’s Order in the Zylog Case

[Guest post by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai] Liability of directors is a sensitive topic in India, particularly for foreign investors who propose to nominate directors to the boards of their Indian investee companies. That is why clauses are inserted in shareholders’ agreements to the effect that the investor’s nominee director will not be identified...

SEBI Elaborates on Board Evaluation

Along with the considerable enhancement in the duties and responsibilities of boards of directors of Indian companies that was occasioned due to the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, there has been a considerable emphasis on board evaluation as a measure of not only enhancing corporate governance in general, but also as a means...

Tata Group Companies: “Long-Term Interests” the Key Touchstone

The episode surrounding the Tata Group has taken further twists and turns. After several Tata Group companies expressed their support in favour of Mr. Mistry, who continues to be chairman of several of those companies, one company – Tata Global Beverages – adopted a different stance. In a board meeting held this week, the directors of Tata Global Beverages decided by a 7:3 majority to replace Mr...

Paper on Directors’ Duties and Stakeholder Interests

Mihir Naniwadekar and I have a working paper on SSRN titled “The Stakeholder Approach Towards Directors’ Duties Under Indian Company Law: A Comparative Analysis”, the abstract of which is as follows: Recognizing that common law does not cast any general duty upon directors towards non-shareholder constituencies, legislatures have sought to formulate a tolerable solution to what they perceive as a...

Delhi High Court on Directors’ Duties and Derivative Actions

It is not very often that we witness cases in India relating to intrinsic company law issues such as breaches of directors’ duties and shareholder remedies through derivative actions. However, questions of directors’ duties have been brought to the fore following the Companies Act, 2013 as they have been codified in the legislation. Derivative action, however, still remains within the realm of...

Board of Directors’ Reliance on Legal Advisers

The question of whether, and to what extent, the board of directors of a company can rely upon the advise of the legal advisers of the company came up for consideration before a division bench of the Rajasthan High Court in Rajasthan Urban Co-operative Bank Ltd. v. Ajay Kumar Katewa (hat-tip: LiveLaw, once again). In this case, certain employees of a co-operative bank were compulsorily retired...

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