Company Law

Background

The law on minority squeeze-out has not been a glorious chapter in the history of India’s company law. The Parliament, as a matter of legislative policy, appears to be uncomfortable with enacting a law that forces minority shareholders to compulsory sell their shares. The government perceives it as a kind of ‘expropriation’. Hence, despite Dr. JJ Irani Committee’s specific recommendation, our Parliament has adopted a conservative approach while providing majority shareholders with the mechanism to ‘buyout’ the shares held by the minority shareholders. Even after the ‘right to property’ was abolished as a fundamental right under our Constitution, law makers seem uncomfortable in giving such right to majority shareholders, and half-hearted attempts have been made to provide majority shareholders with the ability to fully own a company.

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SEBI Delisting Regulations 2021

The SEBI (Delisting of Equity Shares) Regulations, 2021 (“2021 Regulations”), were notified on June 10, 2021. The new regulations do not substantially deviate from the SEBI (Delisting of Equity Shares) Regulations, 2009 (“2009 Regulations”). However, certain incremental changes are introduced that further refine and streamline the delisting process. The key changes effected by the 2021 Regulations, with specific reference to voluntary delisting offers, are as follows:

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