[Gaurang Mansinghka is a 4th year student at the Government Law College, Mumbai] The COVID-19 pandemic has disrupted human life across the globe. Stalled economies, dwindling stock valuations, supply chain disruptions and projections by various organisations indicating a gloomy economic future show that the economic contagion is spreading as fast as the virus itself. This post attempts to answer...
Covid-19: Return of the MAC
[Sridutt Mishra is a 4th year student and Apoorva Upadhyay a 3rd year student, both at the National Law University Odisha] The fear over the spread of Covid-19 has wreaked havoc on the global economy, with initial estimates suggesting an even worse impact than the 2008 Global Financial Crisis and the Great Depression. Central banks and securities regulators across countries such as India, the...
Covid 19: Consequences on Contractual Obligations
[Meenal Maheshwari is the lead transactional counsel at Essar Group] With the pandemic that has subsumed the world, a common question that corporates are dealing with is the impact of the coronavirus epidemic on already contracted obligations. The most relevant question raise is: at what point does Covid-19 pandemic allow a party to delay performance, not perform, renegotiate the existing terms...
Takeover of Unlisted Companies: A New Route
Squeeze out of minority shareholders of companies has been a controversial area. As a co-author and I had discussed, there are a number of methods by which squeeze outs can be effected in Indian companies. By way of a recent set of notification and rule-making efforts, the Ministry of Corporate Affairs (MCA) has just added another method that would be applicable to unlisted companies. Among the...
The Sun Pharma Orders: NCLT Confounds the Law on Cross-Border Demergers?
[Shinoj Koshy is a partner and Mayank Labh an associate at L&L Partners. The views expressed are personal and do not constitute legal advice. An earlier post on the topic is available here.] On 19 December 2019, the Ahmedabad bench of National Company Law Tribunal (“NCLT”) passed the order in which it rejected an application made by Sun Pharmaceutical Industries Limited (“Sun Pharma”) for a...
NCLT Finds Cross-Border Demergers Impermissible under the Companies Act
An important question arose before the National Company Law Tribunal (NLCT), Ahmedabad bench. Are only cross-border mergers and amalgamations permitted under section 234 of the Companies Act, 2013 (the “Act”), or does the provision also encompass cross-border demergers and other similar transactions? The NCLT answered that the scope of section 234 is narrow, and covers only cross-border mergers...
Schemes of Arrangement: Setting a Date
[Rudra Shankar is a fifth-year BA LLB (Hons.) student at Symbiosis Law School, Pune] The procedure for mergers and demergers of companies in India is governed by sections 230 to 232 of the Companies Act, 2013. Companies are required to approach the National Company Law Tribunal (NCLT) to obtain its sanction to such schemes of arrangement before they can take effect. Section 232(6) of the Act...
Takeover Offer Price and the Valuation Conundrum
Generally, in a takeover or other form of transaction involving mergers and acquisitions (M&A), there could be broadly two types of disputes. The first type arises if the companies involved have failed to comply with the requisite procedures for undertaking the transaction, which ultimately adversely affects the interests of the shareholders. This would give rise to a cause for the...
Power to Dispense with Meetings of Shareholders and Creditors in a Scheme of Arrangement
[Anirban Chanda is a 4th Year B.A., LL.B. Student at Jindal Global Law School. The author is grateful to Anujay Shrivastava for his inputs] For a very long time, there was an ambiguity regarding the National Company Law Tribunal’s (NCLT) power to dispense with the meetings of shareholders and creditors in an amalgamation or arrangement, especially in a scenario where the ‘majority’ of the...
Mergers or Demergers involving Listed Transferor Companies and Unlisted Transferee Companies
[Aishwarya Singh is a lawyer based in Mumbai. The views expressed in the article are personal.] This post discusses the regulatory framework relating to mergers or demergers involving a listed company and an unlisted company, wherein the whole or part of the undertaking, property or liabilities of a listed company, being the transferor company, are transferred to an unlisted company, i.e., the...
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