The Venture Intelligence Blog

Private equity – Shareholders’ rights and areas of potential disputes Authors: Shyam Pandya, Shailesh Poria, Aasim Syed, Rashmi Ramnath   INTRODUCTION Keeping pace with the evolution of private equity ( PE ) investments as a mainstream source of funding, there has been a commensurate increase in differences and conflicts with investee companies, promoters and other stakeholders. Such disagreements arise on multiple grounds, ranging from corporate governance, contractual rights & obligations, board nomination and investor exit amongst others. Many of these provisions are documented in a shareholders’ agreement ( SHA ) or an investment agreement. This article focuses on the key contractual legal rights and obligations in SHAs that engender disputes between PE investors and promoters as well as the effective mitigation, response and resolution strategies. CONTRACTUAL RIGHTS AND OBLIGATIONS PE Investors and the promoters typically negotiate their legal rights an...

Press Release Private Equity and Venture Capital firms invested $10.1 Billion (across 167 deals) during the quarter ended September 2019, according to data from  Venture Intelligence , a research service focused on private company financials, transactions and their valuations. The investment value was boosted by Brookfield's $3.7 Billion investment in Reliance Tower Infrastructure Trust . The investment value increased 6% compared to the $9.5 Billion (across 218 transactions) recorded in the same period in 2018 and 62% higher than the immediate previous quarter (which had witnessed $6.2 Billion being invested across 211 transactions). (Note: These figures include Venture Capital investments, but exclude PE investments in Real Estate). Including investments in the latest quarter, 2019 has recorded $26.5 Billion (across 583 investments) compared to $27.3 Billion (across 644 investments) in the same period in 2018. The latest quarter witnessed 19 PE investments wort...

India Inc & TREATY ARBITRATIONS Author: Abhileen Chaturvedi India executed its first bilateral investment treaty ( BIT ) in 1994 with the United Kingdom. The subsequent years witnessed a proliferation of BITs with several nations on account of the ‘liberalization wave’ that swept the country in the 90’s. Simply put, BITs were a bundle of protections that India promised to a foreign investor and which would have been extended to an Indian investment, in the counterparty’s country as well. However, given the intense inbound capital focus characteristic during the early liberalization period, these treaties acted more to provide a sense of security to a foreign investor coming into India as opposed to the other way around. More than two decades down the line, India remains one of the more popular FDI destinations around the globe; however, outward FDI from India has also increased exponentially. Consequently, the BIT paradigm has changed as well-and-must now ensure tha...

Legal metrology laws in India – Issues and challenges Authors: Stella Joseph, Sweta Rajan, Prakhil Mishra, Suhasini Joshi INTRODUCTION The Legal Metrology Act, 2009 ( LMA ) and Legal Metrology (Packaged Commodities) Rules, 2011 ( PCR ) are the primary instruments available to the Government for protecting consumer interest and ensuring consumer awareness. LMA and PCR prescribe the mandatory declarations required to be made on retail packages, including details such as Maximum Retail Price ( MRP ), name and address of the manufacturer, packer and importer, contents and size of the commodity, month and year in which the commodity is packed or imported, contact details in case of consumer complaints etc. Manufacturers, packers and importers are accordingly required to obtain registrations under the LMA. This article analyzes the recent amendments to LMA by the government, impediments faced by the industry, cost of non-compliance (especially in light of the recent incr...

REGULATION AND CERTIFICATION OF DIGITAL MEDIA AND ENTERTAINMENT PLATFORMS The Ministry of Information and Broadcasting (“ MIB ”) has sought to undertake the ginormous task of regularising and certifying the content available on various entertainment platforms and digital media in general, more particularly referred to as the over the top platforms (“ OTT ”). The Minister of MIB, Mr. Prakash Javadekar, during a conference with members of the Central Board of Film Certification (“ CBFC ”) and the Film Industry, on August 31, 2019, stated that the MIB would soon call for talks with the major stakeholders of the prevalent OTTs, including Netflix, Amazon Prime Now, Hotstar etc. as also with members of civil society, technical community, media and legal experts, in order to discuss and formulate a concrete mechanism of certification and regularisation of the content available on such OTTs. This requirement for the MIB to formulate regulations to certify and regularise the content...

GST rate reduction to 5% in the real estate sector: A winning stroke or a run out? Authors: Rohit Jain, Gaurav Sogani The real estate sector in India has faced several headwinds over the past few years. Demonetization in 2016, the introduction of GST in 2017 and the NBFC crisis in 2018. The question now is whether the revised scheme of GST will be a similar event in 2019. At the outset, sale of a property pre and post construction, by a developer, has been treated differently for the purpose of levy of indirect taxes.  This basic issue still bothers the sector as both the transactions eventually entail the sale of an immovable property. Be that as it may, the scheme of taxation for this sector has been continuously changing. With this recent change, this sector is evidencing the 5th regime of taxation, within a decade. The facts are presented in the table below. Period Taxability ITC (Input tax credit) Taxation on developmen...