Over the last year or so, there has been considerable discussion in the press about the allegations of diversion of funds by the erstwhile management of United Spirits Limited (USL) to other companies within the United Breweries (UB) group, including Kingfisher Airlines Limited (KFA). This was also a result of investigations conducted by USL through certain audit firms. Subsequently, this became...
SEBI Order under the Investment Advisers Regulations
A whole-time member of the Securities and Exchange Board of India passed an order involving CapitalVia Global Research Limited under the SEBI (Investment Advisers) Regulations 2013 (the “IA Regulations”). The case arose out of an inspection carried out by SEBI on CapitalVia, which resulted in an interim order being passed by SEBI on November 11, 2016. Since then, SEBI has held hearings and...
SEBI Enhances Oversight on Schemes of Arrangement
Since 2013, the Securities and Exchange Board of India (SEBI) has exercised oversight in respect of schemes of arrangement proposed by listed companies, including schemes such as amalgamation, demerger, reduction of capital and the like (see here and here). Such oversight has now been enshrined in regulations 11, 37 and 94 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations...
Towards a Conducive Framework for REITs – Recent SEBI Amendments
[The following guest post is contributed by Sumit Agrawal, Partner, Suvan Law Advisors and Arka Saha, a final year law Student from National Law University, Orissa. Views are personal] Although the capital and commodities market regulator, the Securities and Exchange Board of India (SEBI), had introduced Real Estate Investment Trusts (REITs) Regulations on September 26, 2014, REITs are yet to...
US Supreme Court Clarifies Tippee Liability in Insider Trading
The law on insider trading has received considerable attention in the United States (US) in recent years. At the same time, the law in the US is quite narrow compared to most other jurisdictions because liability for insider trading arises only if the person trading owes a fiduciary duty to the company and its shareholders, which has subsequently been extended to a duty owed to the source of the...
Protection of Financial Consumers under the Indian Financial Code
[The following guest post is contributed by Sharada Krishnamurthy, LLM student, National University of Singapore and Gokul Ashok Thampi, final year BSL LLB student, ILS Law College, Pune] Introduction Existing financial regulation in India has been amended multiple times resulting in inconsistencies, regulatory gaps and overlaps. There are several regulators with overlapping domains, thereby...
Disgorgement Orders under Indian Securities Law
[The following guest post is contributed by Shubham Janghu, a third year student at Jindal Global Law School with inputs and minor edits by Aditya Swarup, who is an Assistant Professor at Jindal Global Law School.] Introduction Gain-based remedies, though rarely adjudicated in India, are an important aspect of commercial law. The powers of courts to award such remedies arise from statute, for...
SEBI’s Proposals on Stock Advice through Social Media
Nearly a month ago, the Securities and Exchange Board of India (SEBI) issued a Consultation Paper on Amendments/Clarifications to the SEBI (Investment Advisers) Regulations, 2013. Although the consultation paper deals with a number of issues relating to investment advice, one aspect has received undue attention, and perhaps rightly so. Tucked into the consultation paper are a couple of paragraphs...
SEBI’s Enhanced Standards for Credit Rating Agencies
On November 1, 2016, the Securities and Exchange Board of India issued a circular containing Enhanced Standards for Credit Rating Agencies. These seek to introduce greater stringency in the operation of the rating industry. The areas covered include: – Formulation of Rating Criteria and rating processes and public disclosure of the same. – Accountability of Rating Analysts. –...
SEBI to Reconsider the Largest Penalty Imposed
On September 22, 2015, an Adjudicating Officer (AO) of SEBI passed an order against PACL Limited and certain other persons imposing a penalty of Rs. 7,269.5 crores in connection with a case involving the illegal and fraudulent mobilization of funds from the public. This is said to be highest penalty that SEBI has ever imposed. Such a penalty was imposed under section 15HA of the Securities and...
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