Legal Conundrum of Real Money Online Poker 

Indian mythology suggests that playing and losing at a game of dice led to the Pandava brothers, their wife and mother being sent to exile. Regardless of this cautionary tale, the online gaming market in India has taken off in India with revenues reaching Rs. 43.8 billion in FY 18 and expected to grow to Rs. 118.8 billion by 2023.[1]

The question of whether the state should permit businesses relating to betting and gambling was hotly debated in the Constituent Assembly Debates, with several members opposing constitutional sanction to betting and gambling activities. Members drew support for their argument from sources as varied as the apocryphal sufferings of the Pandavas to the ideals of Mahatma Gandhi.

Notwithstanding their opposition, List II of the Seventh Schedule to the Indian Constitution places matters relating to betting and gambling within the legislative purview of state governments. This compromise allowed state governments to choose to either prohibit or regulate (and tax) activities relating to betting and gambling. Continue Reading All In or Fold – The Legal Conundrum of Real Money Online Poker

Lease Transactions Under RERA

Real estate is one of the largest industries in India. In the past two decades, the real estate sector has seen a boost in the country, in terms of the quantum of development (commercial and residential properties) and the price of properties. In spite of the same, real estate has remained the most unregulated of sectors, with every State having a different law to regulate properties. Hence, there was no single superior legislation, which would govern this industry.

The absence of a specific, stringent law for this industry led to exploitation of buyers of the property, by the developers. For example, there could be excessive delay in construction and handing over possession of property, biased/arbitrary contracts, deduction in the usable area of the property by developers, and a lack of transparency in the sector, and such like. Due to these issues, the Government of India, introduced a central legislation viz. the Real Estate (Regulation and Development) Act, 2016 (Act) to regulate the real estate industry, resolve the issued faced by buyers and bring transparency in this sector. All the States have been mandated to form the Real Estate Regulatory Authority for the implementation of Act and form rules and regulations under the same. Continue Reading Lease Transactions Under RERA

shares with differential voting rights - DVR

 

Since December, 2000, Indian companies have been permitted to issue ‘dual class shares’. This was when the concept of ‘shares with differential voting rights’[1] was introduced in the Companies Act, 1956. The Securities and Exchange Board of India (SEBI) has, since July 21, 2009[2], disallowed listed companies to issue shares with superior rights to voting or dividend. However, listed companies were permitted to issue shares with inferior (or fractional) voting rights.

In an apparent reversal of its policy position, SEBI in its board meeting on June 27, 2019, approved a framework for the listing of companies that have shares with superior voting rights, while disallowing any further issuance of shares for those with inferior voting rights. Continue Reading DVRs Are Dead, Long Live DVR!

Liberalisation of Foreign Investment in Insurance Brokers - Budget 2019

Around noon on Friday, July 4th, 2019, the Hon’ble Minister of Finance, in her budget speech to the nation, proposed revisions to the existing foreign investment caps applicable to insurance brokers and other insurance intermediaries in order to allow 100% foreign direct investment (“FDI”). This move was long overdue on the government’s part, particularly in relation to insurance brokers. In fact, a proposal for liberalising foreign investment caps for insurance brokers has been on the drafting table of the Government of India for close to two years now. In the past, a number of representations had also been made by market participants to the various departments of the government highlighting the need to differentiate foreign investment norms for insurance brokers and insurance companies, and to not treat insurance brokers in parity with insurance companies, in so far as foreign investment is concerned[1]. Continue Reading Budget Special : The Liberalisation of Foreign Investment in Insurance Brokers – A Shot in the Arm

REIT IPO Exit

 

*An eight-part series covering the commercial and legal considerations of REIT listings in India. Click here to read Part 2.

Institutional investors have demonstrated a steadfast interest in Indian real estate in recent years. Private equity investments in the real estate sector peaked at $2.5 billion in the first quarter of 2019 – the highest since 2008.[1] With the lion’s share of investments being cornered by commercial office spaces, retail and hospitality sectors, the introduction of the Real Estate Investment Trust (REIT) framework in India comes at an opportune time, providing investors with an additional avenue for potential exits.

However, as the dust settles over India’s first REIT listing, it is now apparent that a REIT IPO is vastly different and distinct from an IPO by a company in many respects. Given the inherent intricacies and nuances of the REIT framework, investors seeking to exit via a REIT listing will need to re-calibrate, re-assess, and re-think their investment strategies, holding structures, investment documentation as well as exit horizons to expediently navigate the new regime. Continue Reading Part III – Exit Stage: Preparing for a REIT IPO Exit

 Recent Maha RERA Directions on Change in Promoter

The real estate sector post enactment of the Real Estate (Regulation and Development) Act, 2016 (Act) is witnessing major consolidation primarily on account of financial constraints faced by small and mid-sized developers. Such consolidation has resulted in developers looking to either exit from their existing projects or enter into collaboration with large established developers for completing such projects.

Hence, in the present scenario, it is of the utmost importance for the industry to know the present legal regime under RERA dealing with new developers / promoters taking over an ongoing projects from existing promoters or from lenders during the process of enforcement of their security over the project. Continue Reading Analysis of Recent Maha RERA Directions on Change in Promoter

Superior Orders Defence - Corporate Fraud

The past few years have seen a marked increase in regulatory investigations and enforcement action into fraud. This increased scrutiny brings into focus the liability of the individuals involved in the fraud and the extent to which such individuals are liable.

Typically, when the company has committed fraud, persons who are responsible for the actions of the company – the ‘directing mind and will– are held liable. In contrast, where a fraud is committed on the company and/or its shareholders, it involves identifying both, the officers at whose behest, or for whose benefit, such actions were undertaken, as well as persons who executed the fraud.  Continue Reading Corporate India, Individual Liability and the Relevance of the Superior Orders Defence

SEBI Circular DVR and Insider Trading Regulations

The Securities and Exchange Board of India (“SEBI”) at its board meeting on June 27, 2019 approved the following important proposals, which become effective on the formal amendment of the respective regulations. A brief summary of the significant changes are set out below: Continue Reading SEBI Board Approves Framework for DVRs, New Definition of ‘Encumbrance’ and Clarifications to the Insider Trading Regulations

 Maharera Amendment Rules 2019

 

Since the enactment of Real Estate (Regulation and Development) Act, 2016 (Act), Government of Maharashtra (GoM) was one of the few States to immediately frame the rules thereunder being Maharashtra Real Estate (Regulation and Development) (Registration  of  Real  Estate  Projects,  Registration of  Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2017 (Rules). The Maharashtra Real Estate Regulatory Authority (MAHA RERA) has been taking the lead to enforce and/or provide clarifications from time to time on the Act and the Rules by issuing various circulars and orders. Recently, the GoM has issued a notification on June 6, 2019 amending certain provisions of the Rules (Amendment Rules). Continue Reading Analysis of the Maha RERA Amendment Rules 2019

What’s So Real About Real Estate Anyway?

*An eight-part series covering the commercial and legal considerations of REIT listings in India. Click here to read Part 1.

India is an outlier in global Real Estate Investment Trust (REIT) regimes. It is the only country with dedicated legislation for REITs and Infrastructure Investment Trusts (while the US and Japan permit REITs to hold certain infrastructure assets, there is no separate legislation). In a way, this showcases the maturity of the regulatory thought process, and it has already been recognised that there is a compelling case for other developed jurisdictions to introduce a similar InvIT model, which meets the needs of investors as well as protects existing REIT legislation (Source: EY – Global perspectives, 2018 REIT Report).

On a standalone basis, ‘non-traditional’ REITs listed only in the US are the second-largest REIT sector globally (with a market cap of USD 480 billion). These non-traditional asset types include healthcare, data centres, billboards, communication towers, student accommodation, single family rental and fiber optic transmission lines (Source: EY – Global perspectives, 2018 REIT Report). Surprisingly, if most of these asset classes were to plan a REIT listing in India, they would have to think twice – their assets may or may not be eligible ‘real estate’ within the meaning of the REIT Regulations. Which brings us to the question, what exactly is real estate for the purpose of the REIT Regulations?

Continue Reading Part II – What’s So Real About Real Estate Anyway?