The UK Bribery Act 2010 is scheduled to become effective July 1, 2011 following the issuance of detailed guidance in March. This is expected to have a significant impact on Indian companies having a demonstrable business presence in the UK. In this behalf, an article in the VC Circle by Saionton Basu and Tom Clark details the various steps to be taken by affected Indian companies to “review or...
Rule 10b-5 and the “Maker” of a statement: Janus Capital v. First Derivative
Last week, in a 5-4 verdict, the US Supreme Court once again narrowly interpreted Rule 10b-5, this time holding that only the “maker” of a false statement could incur 10b-5 liability: “maker” in this context being defined as “person or entity with ultimate authority over the statement.” The case, Janus Capital Group Inc. v. First Derivative Traders, reversed the Fourth Circuit’s holding...
Globalisation: Myth and Reality
A new study asserts that the importance and virtues of globalization, including cross-border trade and foreign investment, may have been overplayed. The Economist has a column discussing Pankaj Ghemawat’s book World 3.0: Global Prosperity and How to Achieve It. It points to some astonishing data and conclusions that emerge from the book: Mr Ghemawat points out that many indicators of global...
Poison Pill Lives on in Corporate America
(Mihir had earlier highlighted the importance of a recent Delaware Chancery Court decision in the Airgas case. We now have a post by Karan Singh Tyagi, who succinctly analyzes the impact of the decision under Delaware law and goes to the nub of the issue involving the role of the board of directors of a target that is the subject matter of a hostile bid. Karan is currently an associate at Gide...
Developments in Delaware: poison pill upheld
Readers may find this decision of the Delaware Court of Chancery, Air Products v. Airgas (judgment dated 15th February, 2011) interesting. The Court has discussed in detail the (Delaware) law on the legality of the ‘poison pill’. The Court summarised its ruling thus: “This case poses the following fundamental question: Can a board of directors, acting in good faith and with a reasonable...
Dealing With the Anti-IPO Sentiment
We usually come across reports of companies preparing or filing for IPOs in order to take advantage of listings on stock exchanges. On the other hand, companies also often display resistance for undertaking IPOs as they are accompanied by costs such as full-blown regulatory oversight and public scrutiny. This is so even when the companies have grown to a significant size and there is a vibrant...
Shareholders Agreements: Clauses and Enforceability
Shareholders agreements are contracts among shareholders of a company (to which the company is also usually a party) that confer rights and impose obligations over and above those provided by company law. The agreements provide for matters such as restrictions on transfer of shares (right of first refusal, right of first offer), forced transfers of shares (tag-along rights, drag-along rights)...
A Season For Insider Trading Probes
… in the U.S. (involving the hedge fund industry),
… as well as in India (involving certain large financial institutions and companies) arising out of the so-called loan scam.
The larger question is whether (and how) the investigations would be pursued to their logical conclusion resulting in effective enforcement of the regulations, which is never an easy task in the case of insider trading.
The Currency Conundrum
The financial press has been abuzz with discussions and commentaries on the recently initiated “currency war”. While much of the discussion is deeply embedded in macro-economics, the Critical Twenties blog has a useful overview of the tricky issues involved and their possible impact on the Indian economy, written in a manner that is palatable to the non-economist.
UK Court of Appeal holds that legal professional privilege reserved for lawyers
In the matter of Prudential PLC and Prudential (Gibraltar) Limited v Special Commissioner of Income Tax and Philip Pandolfo (HM Inspector of Taxes), the UK Court of Appeal has unanimously confirmed that legal professional privilege (LPP) does not apply to any other professional except qualified lawyers – solicitors, barristers and “appropriately qualified” foreign lawyers...
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