Pranav Bafna and CA Priyanshi Chokshi
The Covid-19 pandemic has hemorrhaged balance sheets of business organizations across the board. As money continues to bleed out, limiting the cash outflow is essential to ensure that businesses continue to survive. Alas, a surgical operation on the wounded balance sheet is a must. In this regard, Corporate Restructuring is one of the best tools in the hands of financial doctors to revive a struggling entity.
Undoubtedly, with Corporate Restructuring at the forefront of this battle, M&A’s could be a knight in the shining armor. In this regard, the knight’s armory does have a few chinks, which could stall its progression – Yes, we are referring to “Taxes”.
Continue reading ““Stamping Out” Double Taxation in Mergers &Acquisitions (M&As)”
Akshaya Kamalnath, Lecturer, Auckland University of Technology
The current focus on the monitoring role of the board has come under much criticism. Independent directors play a significant role in this model. However, their ability to truly function independently has been rightly questioned in the last decade. Independent directors are impeded by two main problems: lack of access to relevant information, for which they are reliant on management; and the high likelihood of being captured (to varying degrees) by management. There have been various suggestions to fix these problems, ranging from enhancing board diversity to drastically reforming the current model of corporate boards.
Continue reading “STRENGTHENING BOARDS THROUGH DIVERSITY – A TWO-SIDED MARKET THAT CAN BE EFFECTIVELY SERVICED BY INTERMEDIARIES”
Ayushi Choudhary and Pushpam Raj Pandey, law students, Dr. Ram Manohar Lohiya National Law University
With the outbreak of COVID-19, the Indian Government adopted certain protectionist measures to save the Indian industries from predatory capital investments. As seen in the past, the agenda behind amendments in the Foreign Direct Investment Policy (“FDI Policy”) has been to promote the ease of doing business by liberalizing the policies and making India “an investor-friendly nation”. However, amidst these unprecedented times, the Government opted for a bold move and released a press note on April 17, 2020(“Press Note 3”) to amend the consolidated FDI Policy of 2017. This came into effect on April 23, 2020 via a press release with the aim of regulating the opportunistic takeover of the Indian companies from astute business organizations.
Continue reading “Government Resolutions to regulate Chinese Markets in India”
Khushi Mishra & Rajeev Dadhich , Institute of Law, Nirma University.
The approach of the Indian courts in dealing with the anti-arbitration injunction has been disjunctive and imbalanced. On 12th Aug 2020, the Calcutta High court in Balasore Alloys Limited v. Medima LLC attempted to clarify the position of the Indian courts to grant an anti-arbitration injunction in a foreign seated arbitration. It held that the Indian courts have inherent power to grant anti-arbitration injunction, subject to a higher degree of the threshold. Anti-arbitration injunctions are often viewed as a challenge to the arbitral tribunals’ power to determine its own jurisdictions, generally regarded as the Kompetenz- kompetenz principle, which is perceived to be the pillar of the arbitration framework.
Continue reading “ANTI -ARBITRATION INJUNCTION: JURISDICTION AND DISCRETION”
Shatakshi Tripathi, Symbiosis Law School, Pune
As India’s GDP contracts by 23.9% in the first fiscal of this financial year, it does not come as a surprise that businesses continue to suffer the collateral damage of the COVID pandemic. With crumbling market conditions, active measures have been adopted by the Governments, across the globe, to pacify the increasing distress in the economy. The Indian Government also adopted various measures to mitigate the impact of the COVID crisis, especially on the Micro, Small and Medium Enterprise (“MSME”). Amongst other fiscal measures, the struggling MSME sector gained its first sigh of relief through the Confederation of Indian Industry’s (“CII”) idea to set-up a COVID Rehabilitation and Relief Fund to provide direct monetary assistance to the MSMEs. Along with this, the CII also recommended various measures, inter alia, an extension of bank loans, a special fund, steps regarding the filing of GST and improving the welfare of workers etc. that were necessary to tide in MSME’s through the pandemic. In this article, the author analyzes the measures adopted to protect the MSME sector, with a special focus on the debt restructuring measures and safeguards against opportunistic takeovers.
Continue reading “Restructuring and Anti- Takeover Restructuring Measures to Protect MSME Sector: One Step Forward?”
Priyanshu Agrawal and Vaishnavi Vyas, NMIMS KPM School of Law, Mumbai
In India, squeeze-outs have become an area of increasing interest and scrutiny. The extant legal framework provides for several methods through which squeeze-outs can be effected in Indian companies. On February 03, 2020, a newly notified provision, Section 230(11) of the Companies Act, 2013 (the “Act”) has been introduced to enable minority squeeze-outs in unlisted companies. The new rule enables a majority shareholder holding more than 75% of the stake in a company to make a takeover offer to acquire the minority stake. However, the amendment is a half-baked remedy and provides minimal protection to the minority shareholders. Having said that, the new rules do not envisage any clarity on the existing provisions but merely are an additional tool reflecting hostile takeover in unlisted companies.
Continue reading “Minority Squeeze Out: Dissecting the Conundrum over Multiple Takeover Routes”
Nitya Jain, Institute of Law Nirma University
The unprecedented surge in the global digital market has made data a valuable asset for individuals, corporations and Governments. Cross-border data flows have shrunk the world, allowing people across the globe to have the same user experience on the Internet. However, the explosion in the volume of data has generated as much a threat to its misuse as it created opportunities for companies. Today few global big shot organizations dominate the digital economy and their model is centered around data. Greater access to data provides a greater digital capital to a corporation, granting it an advantage over its competitors. Owing to this disadvantage faced by the domestic and small scale organizations, most jurisdictions impose conditions on when and how data can be transferred, and consequently some resort to physical data localization requirements. A study by Mckinsey Global Institute found that in 2014 the direct impact of cross-border data flows had raised world GDP by 3 percent (worth about $2.2 trillion in 2014), which exceeded the contribution of trade in traditional goods in that year.
Continue reading “Restrictions on Cross Border Data Exchange in India: A Good Move?”
Anurag Mohan Bhatnagar and Amiya Upadhyay, National Law University Odisha
Recently, the National Company Law Appellate Tribunal (NCLAT) passed a decision wherein it ruled that the locus standi to approach the Competition Commission of India (CCI) shall only be restricted to the person who has suffered harm because of anti-competitive practices in the market. This has created a major turmoil in the competition law regime since the decision is in disregard of the intent of the legislature and settled principles of interpretation. Axiomatically, the term “any person” as under Section 19(1)(a) of the Competition Act, 2002 (Act) acts as a gate through which multiple entities can reach the commission with complaints of anti-competitive practices. The provision also ensures healthy competition in the market of India. However, it does not have a mechanism to filter-out ill-motivated and frivolous complaints reaching CCI.
Continue reading “Samir Agarwal vs CCI – NCLAT’s Erroneous Approach Towards Locus Standi”
Gaurav Pingle, Practising Company Secretary and Renucka Vaiddya, Research Associate, Gaurav Pingle & Associates
The ‘Principles Governing Disclosures and Obligations of Listed Entity’ have been prescribed in Chapter II, Regulation 4 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. According to the provisions, a listed entity shall provide adequate and timely information to recognized stock exchange(s) and investors. However, what is adequate information is not very easy to determine and prescribe. It is very subjective – depending upon the nature of the transaction, the volume of transaction, and the company. Further, the Regulations provide that a listed entity shall refrain from misrepresentation and ensure that the information provided to recognized stock exchange(s) and investors is not misleading. A listed entity shall make the specified disclosures and follow its obligations in letter and spirit taking into consideration the interest of all stakeholders. The listed entity is also under an obligation to abide by all the provisions of the applicable laws including the securities laws and also such other guidelines as may be issued from time to time by SEBI and the recognised stock exchange(s) in this regard and as may be applicable.
Continue reading “Disclosure Regime: SAT lays down parameters for timely disclosures”
Dr. Akshaya Kamalnath, Lecturer Auckland University of Technology
India’s regulatory intervention with regard to corporate diversity has focused exclusively on board gender diversity. It has required companies to have atleast one woman on its board. The relevant section of the Companies Act, 2013 is extracted below:
Continue reading “CORPORATE GENDER DIVERSITY IN INDIA – LOOKING BEYOND THE BOARD”