Both the SEBI (Substantial Acquisition of Shares and Takeovers Regulations), 2011 (the Takeover Regulations) as well as the SEBI (Prohibition of Insider Trading) Regulations, 1992 (the PIT Regulations) require a timely disclosure of acquisition or change in shareholdings beyond certain thresholds by substantial shareholders and promoters. Such disclosure requirements are also captured in clause...
Guest Post: Comments on SEBI’s Crowdfunding Paper
[The following post is contributed by Debanshu Mukherjee, a Senior Resident Fellow at Vidhi Centre for Legal Policy, New Delhi] Last month, SEBI had issued a Consultation Paper on regulating Crowdfunding in India. Vidhi Centre for Legal Policy, a New Delhi based independent and not-for-profit think-tank prepared a detailed response to the Paper and submitted it to SEBI earlier this month...
SEBI: Infrastructure Investments and Portfolio Investments
Infrastructure Investment Trusts Last last year, we had discussed the SEBI Consultation Paper on Infrastructure Investment Trusts. While the move towards the establishment of infrastucture investment trusts (InvITs) was welcome, certain issues such as tax treatment remained to be ironed out. Now that the tax treatment has been addressed in the Budget 2014, SEBI has published a draft of the SEBI...
SEBI Order in the Satyam Case
Facts and Sanctions Yesterday, more than five years after the Satyam ex-chairman’s much talked about revelations, SEBI passed an order in the case against five individuals, being the ex-chairman, ex-managing director, ex-Chief Financial Officer, ex-Vice President Finance and ex-Head (Internal Audit). In the 65-page order, SEBI considers the various acts of these individuals in detail that include...
SEBI Order on Delisting
A few weeks ago, we discussed SEBI’s proposals to overhaul the delisting regime. Evident from that discussion were difficulties faced in the current delisting regime. Some of those difficulties have surfaced in an order issued by SEBI yesterday involving the delisting of AstraZeneca Pharma India Limited. SEBI’s order alleges a concerted action between the controlling shareholder of the target and...
US Supreme Court Decision on Securities Fraud Actions
The US Supreme Court yesterday issued its opinion in a significant case that determines the state of the law on class actions for securities fraud. The background and the issue in question have been set out in the ruling as follows: Investors can recover damages in a private securities fraud action only if they prove that they relied on the defendant’s misrepresentation in deciding to buy or sell...
SEBI Consultation Paper on Crowdfunding
We have previously discussed the concept of crowdfunding and the broad nature of the legal issues that it might give rise to. Essentially, crowdfunding that involves the issue of securities (equity or debt) would attract the provisions of company law as well as securities laws. While specific crowdfunding legislation has been introduced in several countries (e.g. JOBS Act in the US), there has...
Power of SEBI to Seek Call Data Records
In the past, we have discussed issues with the onerous evidentiary burden carried by the Securities Exchange Board of India (SEBI) in relation to various securities offences such as insider trading. Following from past experience, SEBI has been conferred additional powers to seek further information in the course of investigation of such offences. Much of these additional powers came by way of...
Enhanced Disclosure of Mutual Fund Voting Policies
Generally, shareholders of a company may exercise their voting rights in any manner in which they deem fit. They are not even obliged to exercise their corporate franchise and may instead choose to abstain rom attending and voting at company meetings. This legal position may engender passivity and shareholder apathy, which have been prevalent in Indian companies for several decades. While law or...
Compensating Investor Losses in India
Posted on SSRN is a new working paper titled “The Protection of Minority Investors and the Compensation of Their Losses: A Case Study of India” that I have authored. The abstract is as follows: Any legal system may potentially deploy two separate but related models to ensure the accuracy of disclosure in the capital markets. First, it may possess legal institutions in the form of regulatory...
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