The Supreme Court in Securities and Exchange Board of India v. Pan Asia Advisors Ltd. clarified that the jurisdiction of the Securities and Exchange Board of India (SEBI) extends to the issuance of global depository receipts (GDRs) by Indian companies to foreign investors, and also to ensnare lead managers to such issuances if they have an adverse impact on the Indian securities markets. Although...
Analysis of the New SEBI Promoter Re-classification Norms
[The following guest post is contributed by Shashank Prabhakar, a Senior Associate with Finsec Law Advisors. These are the author’s personal views] Shareholders in a listed company are classified under two broad categories, i.e., those that belong to the promoter / promoter group and those shareholders who are members of the public with no familial or formal business ties with the promoter /...
Personal Liberty vs. Public (Financial) Interest
In the prolonging Sahara saga, following a contempt action initiated by SEBI last year the Supreme Court ordered judicial custody for Mr. Subrata Roy Sahara and certain other individuals. This is on account of their failure to comply with a previous judgment of the Supreme Court that orders two Sahara companies to repay monies to investors obtained in violation of various securities laws...
Materiality and Disclosure Under Clause 36 of the Listing Agreement
[The following guest post is contributed by Supreme Waskar, who is a corporate lawyer] By an order passed earlier this month, an adjudicating officer of SEBI imposed a fine of Rs. 2 crores on New Delhi Television Ltd. (“NDTV”) for failure to promptly disclose material information to stock exchanges under clause 36 of the listing agreement. Facts of the case On February 21, 2014, NDTV had received...
Duty of a Crowdfund Campaigner towards Contributors
[The following post is contributed by Nikunj Agarwal, a 3rd year, B.A. LL.B. (Hons.) student at RML National Law University, and Arjun Agarwal, a 2nd year, B.A. LL.B. (Hons.) at W.B. National University of Juridical Sciences. They may be contacted at [email protected]. This post discusses the first legal proceeding by the Federal Trade Commission of United States with reference to...
Lenders Empowered to Take Control over Distressed Firms
The Reserve Bank of India (RBI) yesterday conferred a significant power to banks to acquire control of borrower companies which fail to achieve prescribed milestones as part of their restructuring. Under this arrangement, the Joint Lenders’ Forum (or JLF, formed for the purpose of addressing distressed assets) may “convert the whole or part of the loan and interest outstanding into equity shares...
Whether Land is a “Security” Under Collective Investment Schemes
[The following guest post is contributed by Prachi Pandya, who is the founding member of Corporate Attorneys and can be contacted at [email protected]] It is a matter of interest that the trigger point of framing the SEBI (Collective Investment Schemes) Regulations, 1999 (the “CIS Regulations”) was owing to initiatives by private entrepreneurs undertaking plantation or agricultural...
Dissecting SEBI’s Powers Under Section 11B of the SEBI Act, 1992: Part 3
[The following guest post is contributed by Kanwardeep Singh Kapany, and is a continuation of previous posts in Parts 1 and 2] Direction to disgorge does not amount to double jeopardy The expression disgorgement is a common term in developed markets across the world, though it is new to the securities market in India. The said expression connotes repayment of ill-gotten gains that is imposed on...
Dissecting SEBI’s Powers Under Section 11B of the SEBI Act, 1992: Part 2
[The following guest post is contributed by Kanwardeep Singh Kapany, and is a continuation of a previous post in Part 1] Retrospective application Section 11B was introduced to the statute through the 1995 Amendments with effect from January 25, 1995. In a certain case before the Supreme Court of India,[1] the misconduct had taken place in the months of October and November 1993. When directions...
Dissecting SEBI’s Powers Under Section 11B of the SEBI Act, 1992: Part 1
[The following guest post is contributed by Kanwardeep Singh Kapany, a 5th year B.S.L.LL.B student at ILS Law College, Pune. The author can be contacted at [email protected]. In this three-part series, the author analyzes the provisions of Section 11B of the SEBI Act, 1992 which confers wide powers on SEBI to regulate the capital markets. This provision has been used extensively by SEBI...
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