[Shambhavi Sinha is a final year B.B.A., LL.B. (Hons.) student at Symbiosis Law School, Pune] The Securities and Exchange Board of India (“SEBI”) allows an Alternative Investment Fund (“AIF”) to be constituted as a trust, a company, a limited liability partnership (“LLP”), or a body corporate under the SEBI (Alternative Investment Funds) Regulations, 2012 (the...
SEBI’s Proposed Framework for Corporate Bonds and Debenture Trustees
[Rashmi Birmole is a III year B.A., LL.B. student at ILS Law College, Pune] Infrastructure Leasing & Financial Services (“IL&FS”), a non-banking finance company (“NBFC”) belonging to a sub-category of systemically important non-deposit accepting core investment companies was, at the time, engaged in financing and developing infrastructure projects. In June 2018, the collapse of IL&FS...
Comparing Venture Capital Business Forms in India and China
My colleague Lin Lin and I have a working paper titled “Venture Capital In China And India: Does Business Form Matter?”. The abstract is as follows: This paper re-evaluates the importance of business organizational forms with regard to venture capital funds by exploring two major Asian markets, China and India. Evidence suggests that the limited partnership is the leading business form among...
On the Law of Constructive Trusts in India
[Niranjan Sankar Rao is a fourth year B.A. LL.B. (Hons) student at Jindal Global Law School, Sonepat, Haryana, India. The author is grateful to Mr Aditya Swarup, Professor, Jindal Global Law School and Mr Mihir Naniwadekar, Advocate, Bombay High Court, for their guidance.] This post explores what constitutes an equitable or constructive trust in English law and attempts to analyse it in light of...
Proprietary Remedies in Indian Law
We had earlier considered the question of whether there exist proprietary remedies for breaches of directors’ duties. The question of whether a remedy is proprietary or personal makes a difference most importantly in the context of insolvency. If a remedy against the fiduciary is merely personal, the beneficiary will only be able to claim along with other unsecured creditors. If the remedy is...
The Death of the “Absolute Interest”
[The following guest post is contributed by Aditya Swarup, who is an Assistant Professor at the Jindal Global Law School] In the seemingly complex world of corporate finance, creditors often face questions on the kind of security that ought to be taken by the them to support the loan to the borrower, answers to which depend on the relationship between debt and equity of the company. A further...
Disputes Arising out of Trusts Non Arbitrable in India
[The following guest post is contributed by Bhushan Shah & Anchal Singh from Mansukhlal Hiralal & Company. The views expressed in the post are personal.] The Indian Trusts Act, 1882 Act (“Trusts Act“), which is a comprehensive code, broadly deals with the manner of creation of trusts, the rights, powers and duties of trustees, breach of trust and remedies. In Vimal Shah v...
SARFAESI Amendment: A New Role for Debenture Trustees
[The following post is contributed by Vinod Kothari and Nidhi Bothra of Vinod Kothari & Co. The authors can be reached at [email protected] and [email protected] respectively] Introduction The Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Act, 2016[1] (Amendment Act) has introduced several amendments to the Securitisation and...
Flexibility for Investments by Trusts
Trusts in India are governed by a colonial-era legislation, the Indian Trusts Act, 1882. This legislation severely restricts the investments that trustees may make out of trust funds. Section 20 of the Trusts Act provides a list of instruments into which the trustees could invest the trust funds. These include securities of the type that were issued in the colonial period, including “promissory...
Foreign Direct Investment: Trusts as Investment Vehicles
[Vishal Achanta has contributed the following guest post. Vishal is a 5th year student at the National University of Advanced Legal Studies, Kochi] Recently, two investment vehicles have been introduced that as per the relevant SEBI regulations are to be set up as trusts: Real Estate Investment Trusts (‘REITs’) and Infrastructure Investment Trusts (‘IITs’). Both are intended to be pooling...
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