The corporate governance norms prescribed by SEBI were tightened earlier this month (as discussed here), whereby the requirement of independence of directors has been made more stringent. However, it is disheartening to note that while there is a move by the regulator to enhance mandatory norms on corporate governance at a substantive level, there is a lot still left to be desired when it comes...
Disclosure Norms for Law Firms
So far, public listings of securities by law firms has not caught on despite the first law firm (Australia’s Slater & Gordon) listing about a year ago. The legal practice regulations in most jurisdictions do not permit law firms to either take a corporate form or to issue its securities to the public. But, if law firms are permitted to go public, and indeed if they do so, they would be...
Fairness Opinions: Art or Science?
It has been said that valuation of a company is more of an art than a science. This has manifested again in the Bear Stearns transaction that is currently hogging limelight among legal circles. In this case, Lazard issued a fairness opinion when JP Morgan’s transaction with Bear Stearns was first announced that a stock consideration of $2 per share was fair to Bear’s shareholders. Now, under the...
Bear Stearns: Some Legal Complications
JP Morgan Chase yesterday increased its bid for Bear Stearns to $10 per share from its previous bid of $2, fearing a refusal by shareholders to approve its takeover of the beleaguered broking entity. Several large shareholders of Bear Stearns had expressed disappointment at the initial offer price put out by JP Morgan Chase. As the takeover battle progresses, some complications seems to have...
Pitfalls in Emerging Market Investments
A recent unsuccessful bid by Singapore Airlines (SIA) and Temasek to take a 24% stake in China Eastern Airlines is symptomatic of several pitfalls that exist in large investments in emerging markets. Knowledge@Wharton carries an interesting analysis of that case, a synopsis of which is as follows: “It was a perfect deal and it had approval from the top levels of the Chinese government. Singapore...
Buyouts & Law Firms
Thus far, I could only imagine law firms being involved in private equity funding and buyouts as legal advisors on deals.
But, now it appears that we may begin to witness private equity funding and buyouts OF law firms. For details: Law.com and TimesOnline.
Taxing Sovereign Wealth Funds
Just as hearings are being conducted before two subcommittees of the U.S. House of Representatives in relation to sovereign wealth funds (SWFs), and as the International Monetary Fund is stepping up efforts to formulate a code of conduct to regulate SWFs, a new story has emerged regarding the possible tax position of SWFs in the US. Victor Fleischer, who is now an Associate Professor at the...
Some Lessons for M&A Deal Documentation
Recent months have witnessed a spate of M&A deals in the US that have turned sour even before they were consummated, and they have quite naturally ended up in court. In pure legal terms, these involve a scenario where disputes arise between the parties between signing of the definitive agreements and closing whereby one of the parties is not willing to perform its obligations under the...
More on the “Decoupling” Theory
The previous two posts (here and here) have argued that the “decoupling” theory, when it comes to emerging markets (like India and China), is a myth. Here is some additional analysis in an article in the Economist: “INVESTORS were until recently big fans of the “decoupling” theory, the notion that Asian economies can shrug off an American recession. This week’s plunge in share prices, at...
Stoneridge: US Supreme Court Limits Scope of Securities Law Suits
BackgroundA significant decision in the area of securities laws was handed two days ago by the US Supreme Court in the case of Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc. In its judgment (available here), the court (by a 5:3 majority) held that private actions for securities fraud (under Section 10(b) of the Securities Exchange Act, 1934) are not allowed against third parties...
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