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Ramgovind Kuruppath

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Partner in the General Corporate Practice at the Mumbai Office of Cyril Amarchand Mangaldas. Ramgovind specializes in mergers and acquisitions, general corporate and regulatory work. He routinely advises on corporate law, securities law and foreign exchange related issues and has acted for various Indian and overseas companies and funds on acquisition transactions. He can be reached at ramgovind.kuruppath@cyrilshroff.com

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SEBI’s Hammer and the RPT Nail: Navigating SEBI’s Principles-Based Oversight of Related Party Transactions

Related party transactions (“RPTs”)[1] potentially represent an inherent conflict of interest between the interests of listed entities on the one hand and ‘related parties’ on the other. Since Indian listed entities are significantly promoter driven or closely held, SEBI has been constantly reforming the regulatory framework governing RPTs to mitigate the possibility of abuse.Continue Reading SEBI’s Hammer and the RPT Nail: Navigating SEBI’s Principles-Based Oversight of Related Party Transactions

SEBI

Background

SEBI has been progressively tightening the regulatory regime surrounding transactions impacting listed entities – beginning with the implementation of the Kotak Committee recommendations on related party transactions (RPTs) through amendments to the LODR Regulations on May 9, 2018. Shortly thereafter, in November, 2019, SEBI constituted a Working Group (WG) to re-examine the RPT provisions of LODR Regulations, which resulted in the markets regulator notifying amendments on November 9, 2021, which took effect from April 01, 2022. These amendments brought about a paradigm shift by making the RPT approval and disclosure requirements applicable to listed companies in India very expansive and stringent.Continue Reading Proposed Amendments to LODR on Agreements Affecting Listed Companies – Swatting Flies with a Sledgehammer?

Covid-19 And M&A In India - Navigating Risks And Understanding Opportunities 

As the Covid-19 crisis deepens, and the number of positive cases and casualties continue to mount rapidly, governments across the world are enforcing stringent lockdown and social distancing measures. With the engines of economic growth grinding to a halt, the pandemic has mutated into an economic crisis, plunging the global economy into an unparalleled recession. India is no exception[1], and mergers and acquisitions (M&A) in India is sure to sniffle, snuffle and sneeze, at least in the short-term. From a legal standpoint, we believe that there will be consequent changes and fundamental shifts in the M&A landscape.
Continue Reading COVID-19 and M&A in India: Navigating Risks and Understanding Opportunities

Surveillance in the Post-Puttaswamy Era - Right to Privacy

In 1997, the Supreme Court of India (Supreme Court) pronounced its judgment in the case of People’s Union for Civil Liberties (PUCL) v. Union of India (SC, 1997) (PUCL Case), which laid the groundwork for the right to privacy in the context of telephonic surveillance (i.e. wiretaps) and constitutional freedoms.

This article analyses the Supreme Court’s stance on the right to privacy in the PUCL Case, which was upheld in the 2017 landmark judgment by the nine-judge bench in KS Puttaswamy v. Union of India (SC, 2017) (Puttaswamy Case) that declared privacy a fundamental right. The applicability of the right to privacy has recently received further validation in the context of wiretaps in the October 2019 judgment in Vinit Kumar v. Central Bureau of Investigations and Ors (Bom HC, 2019) (Vinit Kumar Case), wherein the Bombay High Court outlined the ambit of the State’s power to surveil its subjects particularly on matters that do not fall within the category of ‘public emergency’ or ‘in the interest of public safety’.
Continue Reading Surveillance in the Post-Puttaswamy Era

Companies (Amendment) Act, 2019

Commitment to social causes is best done voluntarily. Accordingly, corporate social responsibility (CSR) was originally introduced in Section 135 of the Companies Act, 2013 (Companies Act), in keeping with global best practices, to provide a framework to encourage companies to meaningfully contribute to communities.

The framework was premised on the principle that companies would contribute the prescribed amount in good faith and the requirement ‘to explain’ any failure to contribute, in their board report, was considered a sufficient disincentive to ensure compliance.[1] 
Continue Reading Corporate Social Responsibility – Less Carrot More Stick

The Securities and Exchange Board of India (SEBI) recently issued an informal guidance in response to a request for an interpretive letter from Kotak Mahindra Bank Limited (KMBL) on the continual disclosure requirements under the SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations).

Regulation 7(2) of the PIT Regulations prescribes a two-step disclosure mechanism wherein:

  1. Promoters/ employees/ directors of listed companies are required to disclose to the company, within two days of the occurrence of a transaction, the number of securities acquired or disposed, where the value of such securities in the transaction (or a series of transactions in any calendar quarter) amounts to a traded value in excess of Rs. 10 lakh.
  2. The company in turn is required to disclose such trades to the stock exchanges, on which the traded securities are listed, within two days of receipt of the disclosure or upon becoming aware of such information.

Continue Reading SEBI’s Informal Guidance on Continual Disclosures under the Prevention of Insider Trading Regulations

Foreign investors into India have often found that when they seek to enforce customary contractual rights in investment agreements, such as option rights, guarantees and indemnities, they have been hamstrung by the ability of the Indian counterparty to contend that such rights are in contravention of the Foreign Exchange Management Act, 1999 (FEMA) and the regulations issued by the Reserve Bank of India (RBI).

It is in this context that the recent Delhi High Court judgment in the case of Cruz City I Mauritius Holdings v. Unitech Limited, MANU/DE/0965/2017, is relevant, in that it categorically strikes down the defence that an arbitral award is not enforceable on the ground that certain provisions of the contract pursuant to which the award was issued were allegedly in contravention of the FEMA regulations.

Cruz City 1 Mauritius Holdings (Cruz City) filed a petition in the Delhi High Court for enforcement of an arbitral award rendered under the rules of the London Court of International Arbitration (Award). This required Unitech Limited (Unitech) and Burley Holding Limited (Burley), a wholly owned subsidiary of Unitech, to pay Cruz City the pre-determined purchase price of all of Cruz City’s equity shares in a joint venture (incorporated in Mauritius) pursuant to:

  1. A “put option” exercised by Cruz City against Burley.
  2. A keepwell agreement (which was in the nature of a guarantee) whereby Unitech was to make the necessary financial contribution in Burley to enable it to meet its obligations.

Continue Reading Alleged Violation of FEMA now a Dwindling Defence against Enforcement of Contractual Rights