We have previously highlighted the rise of shareholder activism in India (here and here). Activism has been aided by regulatory reforms that have enlarged shareholder participation. In addition, market changes have resulted in previously passive institutional investors becoming more active in recent times. They have further been supported by the emergence of a growing and vibrant proxy advisory...
Derivative Action for Patent Infringement Disallowed
Spicy IP has a post discussing a judgment of the Bombay High Court in Darius Rutton Kavasmaneck v. Gharda Chemicals Limited, which involves a derivative claim by a shareholder of a company that traverses issues of company law and patent law. In disallowing the claim, the Bombay High Court dealt with issues pertaining to derivative actions and clarified circumstances where they would be allowed to...
“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...
Are disputes in s. 397-398 petitions capable of being referred to arbitration?
A learned Single Judge of the Bombay High Court recently considered (in Rakesh Malhotra v. Rajinder Malhotra) the question of whether disputes before the CLB under ss. 397-398 and 402 of the Companies Act, 1956 are capable of being referred to arbitration. Patel J. concluded that having regard to the nature and source of the powers of the CLB, disputes in petition properly brought under ss...
Court-Convened Meetings and Postal Ballot
Background In one of the first few cases interpreting the provisions of the Companies Act, 2013 (the 2013 Act), the Bombay High Court last week issued its judgment on the use of postal ballot facility at a court-convened meeting to consider a scheme of arrangement. In re Godrej Industries Limited, the court was concerned with a scheme of amalgamation of Wadala Commodities Limited into Godrej...
SEBI Announces the Specifics of Revised Corporate Governance Norms
It was nearly a decade ago in October 2004 that the Securities and Exchange Board of India (SEBI) announced substantial revisions to the corporate governance norms contained in clause 49 of the listing agreement that applies to all public companies listed on an Indian stock exchange. The revisions, however, took effect only from January 1, 2006. Since then, there have been some specific...
A Study on Ownership Concentration in Indian Companies
The shareholding pattern of Indian companies has been the subject matter of academic studies, which have consistently shown that Indian companies are controlled substantially by controlling shareholders (or promoters) who hold a significant percentage of shares in public listed companies. The promoters range from business families to the state and to multinational corporations (MNCs). For a...
Compensating Investor Losses in India
Posted on SSRN is a new working paper titled “The Protection of Minority Investors and the Compensation of Their Losses: A Case Study of India” that I have authored. The abstract is as follows: Any legal system may potentially deploy two separate but related models to ensure the accuracy of disclosure in the capital markets. First, it may possess legal institutions in the form of regulatory...
An Instance of Shareholder Activism
A lot has already been said about shareholder activism in India, and how the concept has acquired a strong footing more recently. Shareholder activism may take on different forms. Shareholders may simply dump the stock of companies they believe are not being governed in the desired manner to protect investors (a.k.a. the “Wall Street walk”). They may engage with managements to influence decision...
Guest Post: New Regime of Corporate Governance: Heading Towards “Hung” Companies – Part 2
[The following post is contributed by The following post is contributed by Nivedita Shankar, who is a Senior Associate at Vinod Kothari & Co. She can be reached at [email protected]. The views expressed herein are solely those of the guest author and cannot be ascribed to the other contributors of this Blog. This is a continuation from the previous post in this series] Precedents...
Recent Comments