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Bharat Vasani

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Senior Advisor - Corporate laws at the Mumbai office of Cyril Amarchand Mangaldas. Bharat has over 30 years of experience at senior management level. His areas of specialization includes company law, corporate and commercial laws, securities law, capital market, mergers and acquisitions, joint ventures, media & entertainment law, competition law, employment law and property matters. He heads firm’s media and entertainment law practice.  He is highly regarded in Government circles and in various industry organizations for his proactive approach on public policy issues. Bharat was a member of the Expert Committee appointed by the Government of India to revise the Companies Act, 2013.

Prior to joining the Firm, Bharat was the Group General Counsel of the Tata Group.  He has been at the helm of and steered several large key M&A transactions pursued by the Tata Group in the last 17 years.

Bharat’s contribution to the legal fraternity has been recognized by the Harvard Law School’s Award for Professional Excellence in 2016. Bharat has won several other national and international awards for his various achievements. He had a brilliant academic record in law and first rank holder in all India company secretary examination. He can be reached at bharat.vasani@cyrilshroff.com

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NFRA Circular on Fraud Reporting and India Inc.’s Dilemma

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In recent years, India has witnessed a slew of accounting frauds, especially in the booming start-up ecosystem. Even established players have not been able to escape the ‘fraud virus’, thereby tarnishing reputations built over centuries. Over the years, businesses in various key sectors of the Indian economy have been rife with corporate governance issues, as is evident from recent reports of alleged violations of accounting norms, overstatement of revenues and underreporting of expenses[1], delayed filing of documents for foreign direct investment received[2], as well as adoption of fraudulent practices for ever-greening of NPAs[3]. Despite the commendable work done by regulators in tightening various statutory provisions, corporate fraud seems to continue to plague India Inc.Continue Reading NFRA Circular on Fraud Reporting and India Inc.’s Dilemma

Key issues under Section 186 for a corporate lawyer

Legislative History of Section 186:

Granting of inter-corporate loans, making investments and provisions for guarantees was previously regulated by Sections 370 and 372 of the Companies Act, 1956 (the“1956 Act”), which mandated prior Central Government approval (along with compliance with certain other stringent guidelines prescribed by the Ministry of Corporate Affairs) for giving loans/ guarantee/ security in excess of the limits prescribed under the said sections. This position was subsequently changed with the enactment of Section 372A of the 1956 Act (by the Companies (Amendment) Act, 1999), which replaced the need to obtain prior government approval with a self-regulatory mechanism, which mandated prior shareholder approval by a special resolution before granting inter-corporate loans, guarantees or securities beyond the limits prescribed therein..Continue Reading Key issues under Section 186 for a corporate lawyer

What is the Business Judgment Rule?

The Business Judgment Rule is a legal presumption evolved by Delaware courts. It was thereafter adopted by most commonwealth countries. The presumption is that while making business decisions, Directors of a company act in good faith, on an informed basis and in the honest belief that the action is in the best interest of the company. If the above conditions are satisfied, the Board of Directors will not suffer a legal liability from a bad business decision. The rationale being that in an inherently risky global business environment, the Board should be allowed to take business risks without the constant fear of lawsuits.Continue Reading The Business Judgment Rule: The Indian context

Will ‘sale of shares’ amount to ‘sale of an undertaking’ – Has the Conundrum been resolved?

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‘What would constitute an ‘undertaking’ of a company’ has been among the most hotly debated topics in the history of India’s company law regime. This question arises while evaluating whether a transaction falls within the purview of Section 180(1)(a) of the Companies Act, 2013 (“2013 Act”), which corresponds to Section 293(1)(a) of…

Market Rumours SEBI’s New Prescription and India Inc’s Dilemma SM

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With effect from October 1, 2023, India’s top 100 listed entities (based on market capitalisation) would have to mandatorily confirm, deny, or clarify market rumours to the stock exchanges, and this requirement extends to the top 250 listed entities with effect from April 1, 2024. The Securities and Exchange Board of India (“SEBI”), by way of notifying amendments to the LODR Regulations on June 14, 2023 (“LODR Amendments”), has introduced this mandatory requirement under Regulation 30 read with Schedule III of the LODR Regulations (referred to below as the “Market Rumours Amendment”).Continue Reading Market Rumours: SEBI’s New Prescription and India Inc’s Dilemma

Context

The Prevention of Money Laundering Act, 2002 (“PMLA”), which came into force w.e.f. July 01, 2005, was enacted pursuant to India’s international obligations inter alia under the Vienna[1] and Palermo[2] Conventions, the Political Declaration and Global Programme of Action (1990)[3] adopted by the UN General Assembly, and to give effect to the recommendations made by the Financial Action Task Force (FATF) for combating money laundering (popularly known as the “Forty Recommendations”)[4].Continue Reading Spotlight: Why PMLA Scheduled Offences need a fresh look?

Disenfranchising Majority Shareholders

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Even after the ‘right to property’ was abolished as a fundamental right by the 44th Amendment to our Constitution[1], it has continued as a ‘constitutional right’ by virtue of Article 300-A, which provides that – “No person shall be deprived of his property save by authority of law”.Continue Reading Disenfranchising Majority Shareholders – Is it Constitutionally Valid?

WOS Exemption

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Ever since the stock market scam of 2001 (Ketan Parekh Scam) was brought to light, regulators have been vigilant about the use of complex corporate structures to circumvent statutory restrictions and divert company funds. After the magnitude of financial irregularities in the Ketan Parekh Scam came to light, the Joint Parliamentary Committee (“JPC”) and the erstwhile Department of Company Affairs (“DCA”) proposed steps to prevent  companies from using the ‘subsidiary route’ to siphon off funds, by providing inter-corporate loans.[1]Continue Reading The Layering Restrictions & WOS exemption – Need for Regulatory clarity

Context

Instances of financial/ accounting frauds and serious corporate governance failures have become endemic in today’s corporate world, leading to huge erosion in shareholder wealth. On most occasions, such irregularities and failures are detected very late, when it becomes impossible to rewind the clock and undo damage that has already been done. Recent cases of financial/ accounting irregularities have demonstrated that several early warning signals (like disclosures made in the ‘notes’ to  the financial statements) are often not recognised by the Board of Directors (“Board”) and other gatekeepers of governance – thereby raising serious questions regarding their effectiveness.Continue Reading Why do Boards fail to catch ‘sub-sonic sounds’ within the Organisation?

Mergers & Acquisitions

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Convergence of the Indian Accounting Standards (“Ind AS”) with the International Financial Reporting Standards (“IFRS”) can be regarded as the most significant milestone in the Indian accounting paradigm, which has fundamentally altered the rules for the preparation and interpretation of financial statements (“FS”) as also the ground rules for structuring M&A deals.Continue Reading How crucial is knowledge of Ind AS while negotiating an M&A deal?