The principles and norms of corporate governance tend to operate through layers. On the one hand, there is the basic legislation, i.e. the Companies Act, SEBI Act and the like. Then there are specific norms in the form of clause 49 of the listing agreement that are mandatory for listed companies. Finally, there could be voluntary guidelines that exhort companies towards higher standards. That...
SEBI’s Final Order in GDR Manipulation Case
In a September 2011 post, we had discussed an ad-interim ex parte passed by SEBI in relation to a specific transaction structure that involved the use of global depository receipts (GDRs) to allegedly manipulate the stock price of several companies: The modus operandi was as follows. The companies issued GDRs, which were acquired by various foreign institutional investors (FIIs) or their sub...
Supreme Court on Non-Compete Fee Under the Takeover Regulations
[The following post is contributed by Yogesh Chande, Associate Partner, Economic Laws Practice. Views are personal] The Supreme Court passed an order setting aside the Securities Appellate Tribunal (SAT) decision [and order of SEBI] on payment of “non-compete” fee under the erstwhile SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (SEBI Takeover Regulations) Background...
Typographical Errors Ailing Securities Laws?
[The following post is contributed by Vaneesa Abhishek, who is a securities lawyer and a former Legal Officer of the Securities and Exchange Board of India (SEBI)] Background The Securities Laws Amendment Act, 2014 (“2014 Act“) was notified recently. Section 1(4) of the 2014 Act provides that certain provisions that relate to minimum penalty under adjudication chapters of the...
SEBI’s Revisions to Corporate Governance Norms
In April this year, SEBI had announced a revamped clause 49 of the listing agreement specifying the revised corporate governance norms to come into effect from October 1, 2014. This was to bring the SEBI norms in line with the Companies Act, 2013 (2013 Act). However, in certain material respects, the new clause 49 differed from the provisions of the 2013 Act, in that clause 49 imposed a more...
The Securities Laws (Amendment) Act, 2014 – A Critical Analysis
[The following guest post is contributed by Mubashshir Sarshar, who is a lawyer and an alumnus of National Law University Delhi. The author can be reached at [email protected].] Two standalone incidents within a span of one year have managed to change the entire paradigm of the securities market transactions in India. The Sahara and Saradha episodes symbolised the stark loopholes that...
Resources on the Securities Laws (Amendment) Act, 2014
[One of our readers has helpfully shared various resources in connection with the latest legislative amendments relating to the powers and functions of SEBI, which might be of wider interest] The Securities Laws (Amendment) Act, 2014 received the assent of the President on the 22 August, 2014 and was published in the Gazette of India on 25 August, 2014. The debates from Lok Sabha and Rajya Sabha...
Proposal to Further Boost Secondary Market Disclosures
One of our pet peeves has been the considerable disparity in the primary market disclosure norms where SEBI requires extensive disclosures when a company undertakes a public offering and in the secondary market disclosures norms where companies have to make continuous disclosures post-listing. The secondary market disclosure norms are considerably weaker than those for the primary markets...
“Make in India” frustrated by regulations “Made in India”
The Delisting Regulations applicable in India have been controversial since inception. Earlier this year, SEBI published a discussion paper seeking to review them. This Blog commented on the discussion paper here. Earlier this week, in my column in Business Standard, I wrote about how tinkering with the Delisting Regulations will not be of help. The Delisting Regulations is a body of...
Securities Appellate Tribunal reads the Riot Act for judicial indiscipline
In an important reminder to regulatory agencies to adhere to judicial discipline, the Securities Appellate Tribunal has passed an order setting aside an adjudication order passed by the Securities and Exchange Board of India for ignoring the ratio laid down in another order passed by another adjudicating officer. The SAT has directed that the matter be placed before another adjudicating...
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