Last year, the Government had appointed a committee under the chairmanship of Mr. Damodaran, former Chairman of SEBI, to recommend reforms to enhance the regulatory environment for doing business in India. This was in response to the annual Doing Business rankings put out by the World Bank, where India has not been performing satisfactorily with little improvement or the last few years. The...
CERC Order in the Adani Power Case
Last week, the Central Electricity Regulatory Commission (CERC) passed an order relating to Adani Power that has significant implications for the power sector in India. Adani Power, which had entered into power purchase agreements (PPAs) with state utilities in Gujarat and Haryana for sale of power, approached the CERC with a request for relief on account of escalation of imported coal prices due...
Interpretive Guidance in Rule-Making
While reading the Supreme Court’s judgment in the Daiichi case, which Mihir has discussed here, I was particularly struck by certain observations of the court that appear at the end of the judgment. The case involved an intensive reading and close interpretation of the provisions of the SEBI Takeover Regulations. Here are the relevant observations: 57. Before parting with the records of the case...
Bits of Interest
1. Regulation of Credit Rating Agencies Drawing lessons from the role of credit rating agencies (CRAs) in the recent financial crisis, SEBI has imposed additional transparency and disclosure norms for the Indian CRAs. SEBI’s circular issued on May 3, 2010 covers issues such as maintenance of records of the rating process, dealing with conflicts of...
The RTI and Income Tax Returns
The recent decision of the Central Information Commission in the Escorts case, has led to many raised eyebrows. In sum, the CIC held in Mr. Rakesh Gupta v. Public Information Officers (Decision No. CIC/LS/A/2009/000647/SG/5887, available here), that the information submitted to the Income Tax Department by a company cannot be personal information, and even personal information submitted by the...
The SEBI-NSDL Controversy
The recent decision of the SEBI to set aside as ultra vires two orders passed by a Special Committee set up by it has led to a huge furore in commercial and legal circles. The origin of the controversy was the appointment of CB Bhave as the Chairperson of the SEBI at a time when SEBI was investigating the propriety of the actions of the National Securities Depositary Limited (“NSDL”), in relation...
The Resurgence of Securitization and CDS
The concepts of securitization and credit default swaps (CDS) have acquired a negative connotation over the last couple of years since they were said to have triggered the global financial crisis during the second half of 2007. More, importantly, the assets involved were sub-prime loans that underwent a process of disintermediation due to which risk perceptions on the underlying assets were...
Financial Crisis, Economics and Regulation
There is a recent assortment of interesting columns regarding the financial crisis, the role that regulation (or the lack thereof) has played in the exacerbation of the crisis, and the various economic instruments utilized by policy makers to rein in the crisis. The following is a list of these readings: 1. Beyond the crisis by Subir Gokarn in the Business Standard.2. Financial Regulation –...
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