SEBI’s Consultation Paper: Streamlining ‘Promoters’ and ‘Promoter Group’ Definition

By Sinhani Prem, Student at Jindal Global Law School, and Sukriti Bhagat, Associate at IndusLaw


With an objective of aligning and addressing the on-going issue of promoter/promoter group and requirements in an IPO, Securities and Exchange Board of India’s (SEBI) floated a new consultation paper dated 11 May 2021 and proposed four main changes— (1) Reduction in IPO lock-in periods, (2) Definition of the term ‘promoter group’, (3) Streamlining disclosure requirements of ‘group companies’ under the SEBI Issue of Capital and Disclosure Requirements (ICDR) Regulations, 2018, (4) replacing the term ‘promoter’ with ‘person in control’. While the replacement of the term ‘promoter’ with ‘persons in control’ seems to receive extensive scrutiny on account of the fundamental implications it may have on boilerplate corporate law principles in the one-tier structure of corporate governance in India, we believe it is also important to delve into the three other proposals within this consultation paper.

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IRDAI Sandbox Regulations 2019 and India’s Startup Ecosystem: A Brief Legislative and Comparative Analysis

By Nilanjan Kumar, CSL Finance Ltd.


A regulatory sandbox mechanism refers to a legislation-based test bed through which the concerned government regulators test new products and services introduced by financial institutions and body corporates (hereinafter referred to as “Entities”) in a controlled environment to study their market feasibility. In this ‘controlled environment’ the regulators permit certain regulatory relaxations for the purpose of testing while simultaneously studying the potential risks associated with the innovation. This in turn allows the Entities a breathing space to launch their innovations.

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Time to Pause – Rethink – Restart Corporate Governance Practices

By CS Anisha Raheja


The pandemic of Coronavirus (Covid-19) has affected, directly or indirectly, the lives and operations of human beings and entities alike. On one hand, Covid-19 has endangered the life and health of people; on the other hand, it has given rise to unprecedented challenges for business leaders worldwide. The restrictions imposed by governments of many countries, for curbing the spread of the Covid-19, has confronted the business leaders with significant challenges for carrying out the business activities. At the same time, the landscape of corporate governance has evolved with various changes in rules and regulations or relaxations introduced on account of the Covid-19 pandemic. The effects of the Covid-19 on governance would be different in countries across the globe.

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Commercial Disputes and a Limited Right to Appeal

By Priyanshu Agarwal and Soumit Ganguli, Students at Faculty of Law, Jamia Millia Islamia, New Delhi

The Commercial Courts Act, 2015 (Act) is undoubtedly one of the most crucial pieces of legislations enacted in the last few years. It was rolled out with the intention of providing more efficient and expeditious remedies in deciding cases of commercial disputes in order to promote trade and commerce in the country. While India continues to fare well in the World Bank’s Doing Business Report, the ever-growing pendency of commercial disputes continues to be a concern for the nation’s business environment. In order to ‘ease’ this situation, commercial courts were established to reduce delays and dispose of commercial disputes in a more streamlined manner. The essence of the Act lies in deciding specifically commercial disputes by the “[C]onstitution of Commercial Courts, Commercial Division and Commercial Appellate Division in the High Courts for adjudicating commercial disputes of specified value and matters connected therewith or incidental thereto”. Hence, the object of the Act, as a part of India’s Ease of Doing Business initiative, is to develop India’s image as a viable business destination which shall lead to incentivise Foreign Direct Investments (FDI) in the country and, thus, providing a much-needed impetus to the Indian economy.

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SEBI Clears Air Over Remuneration to Promoter-Executive Director

Gaurav Pingle, Practising Company Secretary

Remuneration or compensation to the directors of the company is one of the crucial aspects of corporate governance. The amount of remuneration or increase in the remuneration to directors is usually based on the profitability of the company and its performance for the corresponding financial year. By the amendments introduced by the Companies (Amendment) Act, 2019 and the Companies (Amendment) Act, 2020, the provisions relating to remuneration to non-executive directors / independent directors have been amended. Remuneration to promoter directors (executive directors or managing directors) has always been a matter of discussion.

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Representation and Warranties Insurance & Need for Establishing a Legal Framework in India

Avijit Singh and Chetan Saxena


With the advent of Covid-19 nothing has been left untouched, from a daily household routine to critical market avenues, it has brought new challenges for everyone. However, with these new challenges, various new opportunities have popped up, especially for India. In terms of legal landscape, various novel legal concepts can be introduced in India (already existing in the west) on a much wider scale that can reap benefits. An important domain is the scheme of Representation and Warranties Insurance (“RWI”) in M&A transactions. While Representations and Warranties (together “R&W”) has been an important component of M&A dealings, the introduction of insurance has brought concerns along with multiple benefits. RWI is in its initial phase in India; contrary to the position in the west which has a much wider application and understanding of the concept.

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Poison Pill: A Vaccine for Hostile Takeovers in India?

Aastha Agarwalla and Lavanya Gupta


The coronavirus outbreak has undisputedly pushed corporate entities to vulnerable positions wherein entities have become attractive targets for hostile acquisitions because of the plummeted stock prices. This tension has spurred debates across the globe, including India, on tactical strategies that should be adopted by potential target-entities to thwart such hostile takeovers. There are several anti-takeover strategies, inter-alia, shark-repellant, golden-parachute, staggered-board; however, amongst others, the ‘poison pill strategy’ is being advocated as a successful mechanism to combat hostile takeovers. Many US companies have recently resorted to poison pills, including Hexcel Corp, Woodward Inc., etc. 

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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.



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: