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Legal Capsule by Economic Laws Practice

Minority protection against Oppression and Mismanagement
Authors: Amit Manubarwala, Ananthram Ganesh, Karan Narvekar

Chapter XVI of the Companies Act, 2013 (Act) provides for minority protection against oppression and mismanagement.  Ordinarily, the board of directors of a company is empowered to take decisions binding the company, and outsiders including courts are not permitted to interfere in its affairs. However, when the management of a company purports to conduct its business in a manner prejudicial to the interests of the company, its shareholders, or a minority group of shareholders, its shareholders are empowered under Chapter XVI to approach the court to redress the wrong.24 APPLICATION FOR RELIEF AGAINST OPPRESSION AND MISMANAGEMENT Section 241(1) of the Act provides that shareholders of a company can apply to the National Company Law Tribunal (NCLT) for relief against oppression and mismanagement if: Its affairs are carried out in a manner prejudicial or oppressive …
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Legal Capsule by LexCounsel

Shares with Differential Voting Rights in India - Amendments to the Regulatory Framework
In recent past, there has been a lot of debate around a proper regulatory framework being put in place to enable Indian companies issue shares with differential voting rights (“DVR(s)”) which would enable the promoters to continue retaining control over their companies. Pursuant to this ongoing debate, the Securities Exchange Board of India (“SEBI”) on March 20, 2019 issued a Consultation Paper on “Issuance of shares with Differential Voting Rights” for devising a structure for regulation of shares with DVR(s) under two broad heads, namely, issuance of shares by companies whose equity shares are already listed on stock exchanges; and companies with equity shares which have not been listed as on date but are proposed to be offered to public. Upon receipt of comments of the Primary Market Advisory Committee of SEBI and market participants including issuers and investors on the Consultation Paper, SEB…

Legal Capsule by Law Office of Madhavan Srivatsan

Independence of Independent Directors: A Myth Or Reality?
Authors: Madhavan Srivatsan, Jherrna B. Sharma and Khizer A. Qureshi Law Office of Madhavan Srivatsan

The stability of the Company reflects through its ability to generate wealth and generate profit not only for the promotes but for the minority shareholders as well. In pursuance of achieving the objective of generating wealth and profit, often times the Companies overlook its ethical boundaries in order to create more income for promoters at the cost of minority shareholders, which have proven to be disastrous on revelation. In order to ensure a constant flow of profits without crossing moral and ethical boundaries, Corporate governance was evolved to restrain the Companies from doing unjust acts and foster the trust of the investors and other stakeholders. These days Corporate Governance is a reality which cannot be overlooked by any Company which wants to be successful.
There are a number of factors which compel a Company to ad…

Foreign Portfolio Investors' Regulations– Proposed Changes: Legal Capsule by LexCounsel

Foreign Portfolio Investors' Regulations– Proposed Changes
As the fastest growing major economy in the world, India is an important participant in global investment flows. Overseas funds flow in India both through the Foreign Portfolio Investors ("FPIs") and the Foreign Direct Investment ("FDI") routes with substantial inflows into capital markets. In order to rationalize the investment routes and monitoring of FPIs, the SEBI (Foreign Portfolio Investors) Regulations, 2014 ("FPI Regulations") were notified on January 07, 2014. Over the years, several clarifications, circulars and guidelines have been issued to the FPI Regulations and a need was felt to undertake an extensive review of the FPI regime to consolidate and rationalize the FPI framework.

SEBI therefore constituted a working group under the chairmanship of Shri. Harun R. Khan (Retd. Deputy Governor of Reserve Bank of India) ("Working Committee"), to review the FPI Regulations and ope…

AZB & Partners tops League Table for Legal Advisors for M&A deals in H1 2019

AZB & Partners topped the Venture Intelligence LeagueTable for Legal Advisor to M&A Transactionsin H1 2019. AZB advised M&A deals worth $10.8 Billion (across 34 qualifying deals). Shardul Amarchand Mangaldas (SAM, $9.1 Billion across 25 deals) and Cyril Amarchand Mangaldas (CAM, $8 Billion across 21 deals) took the second and third spot. Khaitan & Co. ($5.1 Billion across 43 deals) and L&L Partners (earlier Luthra & Luthra) with ($5.1 Billion across 13 deals) completed the top five.

The Venture Intelligence League Tables, the first such initiative exclusively tracking transactions involving India-based companies, are based on value of PE and M&A transactions advised by Transaction and Legal Advisory firms.
AZB and SAM advised the GRUH Finance - Bandhan Bank merger and Brookfield's $1.9 Billion buyout of Pipeline Infrastructure from Reliance Industries. CAM, J Sagar Associates and L&L Partners acted as legal advisors to the Rural Electrification Corpor…