Institutionalising public consultations: A step towards building a stakeholder-friendly regulatory threshold

Introduction

 The ‘Draft Policy for Pre-Legislative consultation and comprehensive review of existing Rules and Regulations’, released by the Ministry of Corporate Affairs (“MCA”), became effective from January 1, 2024 (“MCA-PLCP”). This move complements the increased focus on improving the ‘ease of doing business’ across regulators in India[1] and will also help address the inherent non-uniformity in the consultative mechanisms and processes employed by various MCA-formed/governed regulatory bodies. Continue Reading Institutionalising public consultations: A step towards building a stakeholder-friendly regulatory threshold

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

Context:

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

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

Context

‘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

Mergers & Acquisitions

Introduction

While some Indian corporates have been bold acquirers in big-ticket overseas acquisitions, such transactions are rare, often complex, and risky. Indian acquirers have typically used internal accruals or resorted to overseas debt to finance offshore acquisitions due to regulatory restrictions preventing them from using their stock as consideration for the acquisition. Recent liberalisations in the overseas investment framework suggest that this constraint may be going away. While these regulatory changes may provide additional structuring options for cross-border M&A/ restructuring, decisions of certain tribunals on these (relatively recent) amendments may play spoilsport.Continue Reading Cross-Border Demergers: Navigating muddy waters

Context

The regulatory architecture under the Companies Act, 2013 (“Act”), and the SEBI (LODR) Regulations, 2015 (“LODR”), places independent directors (“IDs”) at the forefront of India’s quest for better corporate governance. Given that approximately 75% of listed companies in India are promoter-controlled, the MCA and SEBI have envisaged that the IDs will play a key role in safeguarding minority shareholders’ interest.Continue Reading Gatekeepers of Governance – Independent Directors

security clearance

Background:

The Ministry of Corporate Affairs (“MCA”), vide notification dated June 1, 2022, notified the Companies (Appointment and Qualification of Directors) Amendment Rules, 2022 (“2022 Amendment Rules”), which amended the Companies (Appointment and Qualification of Directors) Rules, 2014 (“Appointment and Qualification Rules”).[1] This amendment states the security clearance requirements needed to hold directorship position in an Indian company, if an individual is a national of a country which shares land border with India.Continue Reading Raising the wall higher: This time no directorship without security clearance

Multi Modal Logistics Parks

BACKGROUND

A systematic logistics network is crucial to economic growth. To develop this sector, the Cabinet Committee on Economic Affairs, in October 2017, under the ‘Bharatmala Pariyojana’, mandated the Ministry of Roads Transport and Highways (MoRTH) to develop Multi Model Logistics Parks (MMLP) across the country[1].Continue Reading Multi Modal Logistics Parks – Logistics Future of India

Delegated Legislation

Background

Over the last few decades, there has been a trend where only a small fraction of law stems directly from ‘legislations’ passed by the Parliament. In the sphere of corporate law, the tendency of the law makers is to enact ‘bare-bone’ statutes such as the SEBI Act, 1992 (“SEBI Act”) and the Foreign Exchange Management Act, 1999 (“FEMA”), and a bulk of the law is enacted by the designated regulators, such as the MCA, SEBI and RBI.Continue Reading The Rise & Rise of Delegated Legislation – Do we need more Safeguards?

An Introduction of ESG Disclosures in Indian Regulatory Space

Introduction

In the previous part, we first discussed the relevance of ESG disclosures for stakeholders involved in business processes, and then reflected upon the existing regulatory space for such disclosures along with the Business Responsibility and Sustainability Reporting (“BRSR”) framework, recently introduced by Securities Exchange Board of India (“SEBI”). Taking forward the discussion, this part will analyse the BRSR framework and suggest ways in which it could be further improved.Continue Reading An Introduction of ESG Disclosures in Indian Regulatory Space – Part 2

An Introduction of ESG Disclosures in Indian Regulatory Space

Introduction

The 2021 conference of parties (CoP26) on climate change was recently held in Glasgow, with the global community negotiating ways to manage climate change and mitigate its impact while ensuring that no adverse effect is felt on employment, food security, and living standards of the masses. Addressing climate change is one the most urgent tasks before us, particularly for India, due to rising threats from drastic physical events, such as floods, droughts, hurricanes, rising temperatures, and other climate change related events. It has become necessary to take immediate and consequential steps towards climate change adaption and mitigation; otherwise, the global community is set to lose trillions of dollars and millions of jobs.Continue Reading An Introduction of ESG Disclosures in Indian Regulatory Space – Part 1