On April 6, 2023, India introduced a new legal regime for operators of online games by introducing amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“Intermediary Rules”) (amendments are referred to as “Gaming Amendments”).
Continue Reading The Online Gaming Intermediaries Regulations: What is New?
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?
The Hon’ble Supreme Court of India (“Hon’ble SC”) in its recent judgment dated March 27, 2023, in State Bank of India & Ors. v. Rajesh Agarwal & Ors.[i], has conclusively decided on the question of whether the principles of natural justice should be read into the provisions of the Reserve Bank of India (“RBI”) (Fraud Classification and Reporting by Commercial Banks and Select FIs) Directions, 2016[ii] (“Master Directions on Frauds”). The question, which has been pending before various High Courts and was raised before the Hon’ble SC in numerous appeals, has now been answered in the affirmative by the Hon’ble SC by holding that the principles of natural justice, particularly the rule of audi alteram partem, has to be necessarily read into the Master Directions on Frauds to save it from vice of arbitrariness as classification of an account as fraud entails serious civil consequences for the borrowers.
Continue Reading Principles of Natural Justice Prevail: Supreme Court Reads Rule of Audi Alteram Partem into Master Directions on Frauds
The cardinal principle of company law, as enshrined under Section 129(1) of the Companies Act, 2013 (“Companies Act”), is that the financial statements (“FS”) should give a ‘true and fair view’ of the state of affairs of the company, comply with the accounting standards notified under Section 133, and also be in the form provided for different classes of companies under Schedule III.
Continue Reading Non-compliance with Accounting Standards – Will it amount to an FUTP Offence?
Price regulation of non-scheduled formulations has always been a contentious issue. While the Government can set prices of drug formulations that are listed on the National List of Essential Medicines (“NLEM”) – Scheduled Formulations, the Government can at best monitor prices of drug formulations that are not listed on the NLEM – Non-scheduled Formulations.
The Delhi High Court in its recent judgment in the matter of Bharat Serums and Vaccines Limited v. Union of India & Ors. provided much needed clarity on paragraph 20 Drugs (Price Control) Order, 2013 (“DPCO 2013”), which regulated the pricing of non-scheduled formulations and drugs, focusing on the legal implications ensuing from the breach thereof.
Continue Reading Analysing Bharat Serums and Vaccines Limited v. Union of India & Ors. judgement
There is no denying that India is one of the most significant players in the global pharmaceuticals space, especially in the generic and affordable vaccines segment. Emerging markets such as India are expected to become further crucial in the foreseeable future, given the global supply chain disruptions and discontinuities. Fifty percent of the global demand for various vaccines is met by the Indian pharmaceuticals industry and as per the Indian Economic Survey 2021, the domestic market is expected to grow 3x in the next decade. It is expected to develop at an annual rate of 11% over the next two years, possibly exceeding $60 billion in value.[1] India’s healthcare market is expected to reach $372 billion, driven by rising income, better health awareness and increasing access to insurance. India’s healthcare public expenditure stood at 2.1% of GDP in 2021-22 against 1.8% in 2020-21. Furthermore, in Union Budget 2022-23, Rs 86,200.65 crore ($11.28 billion) was allocated to the Ministry of Health and Family Welfare (MoHFW).
Continue Reading Examining the Regulatory and Operational Issues Affecting M&A in Pharmaceuticals and Healthcare Industry
The concept of promoter and promoter group of a listed company finds a mention in the SEBI regulations, and assumes significance as it impacts a wide range of M&A transactions involving listed companies. After closing in a change in control deal, one needs to follow the conditions prescribed in Regulation 31A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), to re-classify the outgoing promoter. The conditions in Regulation 31A are onerous, cumbersome, and not in consonance with the way the transacting parties and market participants think. We will also explain below how Regulation 31A is not in consonance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations), and does not reflect the realities of deal making and therefore, needs a change.
The development in science and technology has scaled multiple heights and reached unprecedented levels of sophistication. Advanced methods are being used in all branches of research and technology, including medical diagnosis. Given that diagnosis is done either voluntarily or pursuant to a prescription, the field of medical testing is broad and encompasses a variety of situations. The process of diagnosis depends upon a range of variables, which includes diversified procedures, competent personnel, functional instruments, suitable facility or lab, reagent, etc. Each factor is as important as the other. Further, medical devices include a gamut of instruments ranging from a miniscule syringe used to collect blood samples, to sophisticated CT scanners. Both have the capacity to grossly impact a diagnosis. Hence, arises the need to minimise the variables and ensure uniformity in quality and standards. And, while the monitoring of medical devices, facilities and competent personnel are largely regulated, it is important to ensure that the diagnostic procedures are standardised.
Continue Reading Evolving Landscape of Diagnostics’ Regulation in India & Digital Healthcare
The Ministry of Finance has issued a notification dated March 07, 2023 (“Notification”), classifying entities that engage in specific activities (see below) related to Virtual Digital Assets (“VDA(s)”) in the course of business, as “persons carrying on designated business or profession” Therefore, such entities are now considered “Reporting Entities” under the Prevention of Money Laundering Act, 2002 and the corresponding rules (“PMLA”).
Continue Reading PMLA Concerns for the Skill Gaming Sector?
On July 12, 2022, the Supreme Court of India (“Supreme Court”) passed a judgment in Vidarbha Industries Power Limited v. Axis Bank Limited[1] (“Vidarbha”), which considered the question whether Section 7(5)(a) of the Insolvency and Bankruptcy Code, 2016 (“Code”), is mandatory or discretionary in nature. Section 7(5)(a) of the Code states that the National Company Law Tribunal (“NCLT”) “may” admit an Application filed under Section 7 of the Code (“Application”), if (a) a default has occurred; (b) the Application is complete; and (c) there is no disciplinary proceeding pending against the proposed resolution professional. The Supreme Court held that Section 7(5)(a) of the Code allows the NCLT to reject an Application even if the financial creditor establishes ‘debt’ and ‘default’ on the part of the corporate debtor.
Continue Reading The Vidarbha Aftermath