Tag: Minority Shareholders
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Non-compete Fee: A Bane for Minority Shareholders
[Posted by Umakanth Varottil] [The following post is contributed by Soham Roy & Akhil Nene, who are 5th year students at the National Law University Odisha] A non-compete fee is paid to exiting promoters or founders of a company to ensure that they do not compete for a certain period of time with the company…
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Ruling on Shareholder Rights to Inspect Company Records
[Posted by Umakanth Varottil] [The following guest post is contributed by Dheeraj Kumar Sharma, who is a Manager at Vinod Kothari & Company] Introduction The Mumbai Bench of the Company Law Board (‘CLB’), through its order dated April 16, 2015 in the case of Mr. Anil Kumar Poddar v. Bonanza Industries Limited, dismissed the application…
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Case-Study Evidence of Shareholder Activism
[Posted by Umakanth Varottil] 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…
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Derivative Action for Patent Infringement Disallowed
[Posted by Umakanth Varottil] 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…
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“Dual-class” Share Structures
[Posted by Umakanth Varottil] 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…
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Are disputes in s. 397-398 petitions capable of being referred to arbitration?
[Posted by Mihir Naniwadekar] Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:”Table Normal”; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:””; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:”Calibri”,”sans-serif”; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:”Times New Roman”; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} A learned Single Judge of the Bombay High Court…
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Court-Convened Meetings and Postal Ballot
[Posted by Umakanth Varottil] 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…
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SEBI Announces the Specifics of Revised Corporate Governance Norms
[Posted by Umakanth Varottil] 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…
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A Study on Ownership Concentration in Indian Companies
[Posted by Umakanth Varottil] 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…
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Compensating Investor Losses in India
[Posted by Umakanth Varottil] 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…