[The following guest post is contributed by Arjya Majumdar, who is an Assistant Professor at the Jindal Global Law School. He can be contacted at [email protected]] In the aftermath of the 2008 financial crisis, small businesses found it increasingly difficult to raise funds. As a response, crowdfunding has emerged as a viable alternative for sourcing capital to support innovative...
The State of Shareholder Activism
The latest issue of the Economist carries two pieces (here and here) arguing about the importance of shareholder activism as a means to enhance the management and governance of companies. The magazine appears to extol the virtues of activism in the current economic environment, although some might dispute whether activist investors have had as much of a positive role to play in corporate...
Insider Trading and the Risks of Due Diligence Access
[The following post is contributed by Aparna Ravi, a researcher at the Centre for Law and Policy Research, Bangalore and previously a capital markets lawyer in London. She can be contacted at [email protected] She presents an interesting critique of the new SEBI insider trading regulations on matters relating to due diligence set in the backdrop of international experience] In...
Insider Trading and Tippee Liability
In recent times, there has been a lot of discussion about how the regulators and the prosecution have been enormously successful in obtaining convictions in insider trading cases in the U.S. That momentum may have been somewhat restrained by a ruling of the United States Court of Appeals for the Second Circuit in United States v. Newman, et. al. In that case, analysts at several hedge funds...
Reverse Cross-Listings: Foreign Companies Accessing the Indian Capital Markets
Corporate and capital markets laws in India have allowed foreign companies to list in India in the form of Indian depository receipts (IDRs). While this facility was allowed with much fanfare, it has been accessed so far by only one company, i.e. Standard Chartered Bank. However, more companies might likely follow in the future. A new paper titled “Reverse Cross-Listings — The Coming Race...
Repeal of the “Swaps Push Out” Rule— An Evaluation
[The following post is contributed by Mandar Kagade, who is a Policy Analyst at the Bharti Institute of Public Policy, Indian School of Business] The United States Congress recently passed the Consolidated and Further Continuing Appropriations Act, 2015 that made headlines for reasons not at all related to appropriations; it was in the news rather for including provisions that repealed the so...
Delaware Court Ruling on Deal Conditions in the Apollo-Cooper Merger
A recent Delaware court ruling deals with matters involving the “unraveling of the Agreement and Plan of Merger (the “Merger Agreement”) by which a large Indian tire manunfacturer—[Apollo]—was to buy a large American tire company—Cooper Tire & Rubber Company (“Cooper”).” Billed as among the largest overseas acquisitions by an Indian company, Apollo was to acquire all the shares of Cooper...
A Case Study for Spinoffs
Mergers and acquisitions (M&A) transactions tend to be analyzed mostly from the acquirer’s perspective, whether they involve mergers or takeovers. At the same time, they have enormous implications for the target or the seller. Businesses may have to be downsized, contracted or split due to which companies may have to engage in sale transactions or restructuring of their business undertakings...
“Dual-class” Share Structures
The recent NYSE listing of Alibaba has once again brought to the fore the issue of dual-class share structures, as discussed in this column in the Economist. Alibaba’s founder and a group of insider shareholders have control rights that are disproportionate to their economic rights. The wave of dual-class structures in tech-IPOs was triggered by Google’s IPO in 2004, which was followed by another...
Restrictions on Tax Inversions
A few months ago, we had discussed the use of “inversion” deals by U.S. companies to minimize the effect of U.S. taxes. Since then, inversions have been the subject matter of intense debate from a policy perspective. Two potential regulatory responses have been proffered. One is more short-term by which the U.S. government limits the ability of companies to carry out inversion deals by either...
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