It is a well-known fact that schemes of arrangement are a popular method to implement mergers and corporate restructuring transactions in India. While they involves an elaborate and cumbersome procedure and the oversight of the court, parties enjoy tremendous flexibility in structuring their transactions. More importantly, such a scheme is binding on the dissenting minority. When this involves...
The Satyam Case: Insider Trading and Pledge
[The following guest post is contributed by Shashank Prabhakar, a Senior Associate with Finsec Law Advisors. These are the author’s personal views] The Whole Time Member of SEBI (‘WTM’) recently passed an order against certain relatives of Mr. Ramalinga Raju and entities belonging to the promoter group of Satyam Computers for violation of Section 12A of the Securities and Exchange Board of India...
It’s the “Material” Things That Matter: Disclosures under the New SEBI Regulations
[The following guest post is contributed by Yogesh Chande, Partner and Malek-ul-Ashtar Shipchandler, Associate, at Shardul Amarchand Mangaldas. Views expressed herein are personal and solely that of the authors. A related post by Somasekhar Sundaresan is available here.] Background The Securities and Exchange Board of India (“SEBI”) notified the SEBI (Listing Obligations and Disclosure...
A Material Mistake in Disclosure Obligations
The newly notified SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which would take effect on December 1, 2015 remove materiality as a relevant factor for disclosures of “acquisitions” by listed companies. The term “acquisitions” has been defined to mean acquisition of 5% in any other company and a movement of 2% in shareholding thereafter...
How Independent Are Our Financial Regulators?
[The following guest post is contributed by Bhargavi Zaveri, who is at the National Institute of Public Finance and Policy (NIPFP), New Delhi. Views are personal. An abbreviated version of this post appeared in the Business Standard] A sequence of recent incidents has rekindled the public discourse on the independence of our financial sector regulators from the Government. Critics of the draft...
SEBI Consultation: Forfeiture of Shares and Impact on Takeover Regulations
SEBI has issued a Discussion Paper on “Review of policy relating to forfeiture of partly paid-up shares – Amendments to SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011”. The paper opens with references to partly-paid shares and forfeiture of unpaid capital as provided under the Companies Act, 2013. Essentially, in case of partly paid shares, the holder can exercise voting...
SEBI’s Guidance Note on Insider Trading Regulations
After the SEBI (Prohibition of Insider Trading) Regulations, 2015 (the “Regulations”) were issued that came into effect on May 15, 2015, SEBI received several requests from companies and their advisors on certain operational issues that came to the fore in the implementation of the Regulations. In order to address those, SEBI issued a Guidance Note earlier this week. One of the more prominent...
Start-up India: Should foreign listing of start-ups be facilitated?
[This guest post is by Pratik Datta and Mehtab Hans, who are Consultants at the National Institute of Public Finance and Policy (NIPFP), New Delhi. They can be reached at [email protected] and [email protected] respectively.] Last week, the SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2015 were issued to facilitate listing of start-ups on institutional...
Participatory Notes
[The following guest post is contributed by Rishi A, a fourth year student of Hidayatullah National Law University] Introduction The Supreme Court appointed Special Investigations Team (“SIT”), in its report on how best to curb black money, made a number of recommendations. One of these was to check the misuse of participatory notes (“p-notes”). When the markets opened on the following...
SEBI Regulations Inapplicable to “Phantom” Stock Schemes
The SEBI (Share Based Employee Benefits) Regulations, 2014 (the “Regulations”) regulate various types of schemes offered by companies to their employees relating to shares. In two separate letters issued pursuant to requests for informal guidance, SEBI has stated that the Regulations are not applicable to phantom stock options and similar schemes that do not involve the actual issue or transfer...
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