TagSEBI

Managing Significant Transactions & Arrangements with Subsidiaries: Part 2

[Himanshu Dubey and Payal Agarwal are with Vinod Kothari & Co. Part 1 is available here] Basis for assessment – standalone or consolidated? Having dealt with the parameter to be considered for various transactions, another question that may arise is whether the total revenues or expenses or assets or liabilities, as the case may be, have to be considered on a standalone basis or on a...

Managing Significant Transactions & Arrangements with Subsidiaries: Part 1

[Himanshu Dubey and Payal Agarwal are with Vinod Kothari & Co.] The seamless flow of information between a holding company and its subsidiaries is imperative for effective governance at the level of a corporate group. Since listed companies in India often function with complex structures with a number of subsidiaries, it is not feasible for the holding company to deliberate upon all the...

ESOPs to Non-permanent Employees: An Analysis of SEBI’s Recommendation

[Anant Budhraja is a III year student at the West Bengal National University of Juridical Sciences, Kolkata] Unacademy, the ed-tech unicorn, became the first Indian company to issue Employee Stock Options (ESOPs) to gig workers, i.e., educators on their platform, in July 2021.These options, referred to as Teachers Stock Options (TSOPs), constituted a corpus of $40 million, which had directly...

Compounding under Section 24A of SEBI Act: Charting A New Course

[Navya Saxena and Aadya Bansal are 4th-year B.A., LL.B. (Hons.) students at National Law Institute University, Bhopal] In Prakash Gupta v. Securities and Exchange Board of India (26 July 2021), the Supreme Court has addressed the question of whether the Securities and Exchange Board of India (“SEBI”) has veto power over compounding of offences under the Securities and Exchange Board of India Act...

Qualitative Tests for Accredited Investors: A Comparative Study

[Mehek Wadhwani and Rishi Raj are third-year students of B.A. LL.B. (Hons.) at MNLU Aurangabad] The Securities and Exchange Board of India (SEBI) recently ushered in the concept of a new class of investors in the Indian securities market, termed as accredited investors or qualified investors or professional investors. On 3 August 2021, the SEBI (Alternative Investment Funds) Regulations, 2012...

Compounding of Offences under the SEBI Act: Limiting the Role of SEBI

[Abhiraam Shukla is a III year student at the National Law Institute University, Bhopal] Section 24A of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) provides for the compounding/composition of certain offences which are punishable under the SEBI Act. It stipulates that any offence under the SEBI Act which is not punishable exclusively by imprisonment or by imprisonment and a...

Stalemate on the SAT in the PNB Housing Preferential Allotment Case

A two-member bench of the Securities Appellate Tribunal (SAT) yesterday returned a split verdict on the legal issues surrounding the preferential allotment of shares by PNB Housing Finance Limited. The facts are relatively straightforward. Since PNB Housing’s controlling shareholder, Punjab National Bank, was unable to infuse funds due to the lack of regulatory approval from the Reserve Bank of...

Mandatory Sunset Provisions in Shares with Superior Voting Rights

[Bhavya Solanki is a 4th year B.A., LL.B. (Hons.) student at the Maharashtra National Law University, Mumbai] Shares with differential voting rights [“DVR”], internationally known as dual class shares [“DCS”], are shares which have rights disproportionate to their economic ownership. DVRs include shares with superior voting rights [“SR Shares”] and shares with...

Fractional Ownership: Recommendations for Regulation

[Malavika Devaya is an Associate at Poovayya & Co., Bengaluru] Myre Capital, a fractional ownership platform by Morphogenesis, recently made headlines by raising INR 50 crores for its offering of the integrated township Magarpatta Cybercity. A concept that is fast gaining popularity in India but has been around in developed countries for a while now, fractional ownership is the obvious answer...

Disgorgement: An Equitable Remedy or a Penal Measure?

[Anoushka Biswas is a 3rd Year, B.A. LL.B. (Hons.) student at National University of Juridical Sciences, Kolkata] Disgorgement harbours the principle of giving up the possession of profits illegally obtained, leading to unjust enrichment. Black’s Law Dictionary defines disgorgement as “the act of giving up something (such as profits illegally obtained) on demand or by legal compulsion”. Unjust...

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