TagSEBI

SAT Rejects Appeals in the United Spirits Case

We had earlier this year discussed SEBI’s ad-interim ex parte order in the United Spirits Limited (USL) case by which several persons (including Mr. Vijay Mallya) were prohibited from buying, selling or otherwise dealing in any securities, with some of them being restrained from holding positions as directors or key managerial personnel of any listed company. Against this, some of the persons...

Analysis of the Material Adverse Change Clause in the Indian Context

[Guest post by Tushit Mishra, who is a Third Year Student at NALSAR University of Law] Introduction The economic viability of an agreement in securities transactions is subject to a wide range of factors, due to which agreements concerning mergers and acquisitions (M&A) are constantly under a cloud of uncertainty. The past realization of such uncertainty with regards to risk mitigation and...

Takeover Disclosures: Single Penalty for Violation of Single Obligation

[The following post is contributed by Supreme Waskar, who is a corporate lawyer in Mumbai] The Securities and Exchange Board of India (“SEBI”) has, by way of its order passed on July 28, 2017 (“Recent Order”), reversed its earlier view and held that the disclosure obligation under regulation 8(2) of the erstwhile takeover norms, i.e., Securities and Exchange Board of India (Substantial...

SAT Order on “Shell” Companies

The issue of “shell” companies has captured the attention of the regulators over the last couple of years. There is a pervading sense of regulatory fear that, left unchecked, shell companies may be utilized for various illegal purposes, including money laundering. The Government has been taking steps at various levels to deal with what it visualizes as a menace of shell companies. One instance...

Report on Regulation of Credit Rating Agencies in India

[Guest post by Shreya Prakash, who is a Research Fellow in the Corporate Law & Financial Regulation vertical at the Vidhi Centre for Legal Policy] Credit ratings are an opinion of a recognised entity on the relative creditworthiness of a debt instrument. Entities that form these opinions, i.e., credit rating agencies (‘CRAs’), are essential gatekeepers of the financial system. In fact...

SEBI Requires Disclosure of Loan Defaults

Over the last couple of years, there has been a steady regulatory move to create some connections between the banking system and the capital markets in order to address cases of loan defaults by companies, especially those listed on the stock exchanges. Take the case of wilful defaulters, who are effectively now kept out of the capital markets (as discussed here on this Blog). Another mechanism...

SAT Affirms SEBI’s Power to Lift the Corporate Veil

In an order passed yesterday in Sahara Asset Management Company P. Ltd v. Securities and Exchange Board of India, the Securities Appellate Tribunal (“SAT”) considered an appeal from an order of the Securities and Exchange Board of India (“SEBI”) in which SEBI had found that Sahara India Financial Corporation Ltd. (“Sahara Sponsor”) is not a “fit and proper” person and hence the Sahara Mutual Fund...

Holding Period and Corporate Veil in a Takeover Offer

[Guest post by Vaneesa Agrawal, who is Partner, Suvan Law Advisors. She can be reached at info@suvanlaw.com.] Last week Supreme Court of India issued a significant judgement in the matter of Laurel Energetics Pvt. Ltd. v. SEBI, Civil Appeal No. 5675 of 2017 on the issue of the interpretation of Regulation 10 of the SEBI (Substantial Acquisition of...

Non-Disposal Undertaking and its Reporting in the Indian Securities Market

[Guest post by Divyajyot Verma, a student at the Jindal Global Law School] Non-Disposal Undertakings (or agreements) (“NDUs”) are signed usually by the debtor in favour of the lender in relation to any loan obligation undertaken by the debtor. An NDU helps in ensuring that the debtor does not transfer the shares held by it in a company by way of outside arrangements such that the creditor is left...

Minimizing the Liability of Directors: SEBI’s Order in the Zylog Case

[Guest post by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai] Liability of directors is a sensitive topic in India, particularly for foreign investors who propose to nominate directors to the boards of their Indian investee companies. That is why clauses are inserted in shareholders’ agreements to the effect that the investor’s nominee director will not be identified...

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