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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

The provisions of the Companies Act, 2013 (the Act), and the rules framed thereunder, mandate companies to file requisite documents, including annual returns and financial statements, with the concerned Registrar of Companies (RoC) of their jurisdiction. Non-adherence to such provisions and non-filing of the requisite documents is an offence, exposing non-complaint companies and its directors to severe penal consequences, including fines and prosecution.

However, the records of the Ministry of Corporate Affairs (MCA) and the National Company Law Tribunals (NCLT) would clearly reveal that a lot of companies have been non-compliant with their filings. This non-compliance has been a menace to all the stakeholders involved, including, inter alia, (i) the companies and directors who have to face penal consequences for such non-compliances; (ii) the MCA and its administration who are engaged in the process of updating the records; (iii) the public/ shareholders who do not get access to the records of the companies; and (iv) the NCLT and the office of Regional Directors, which are burdened with compounding cases.…

Continue Reading A Fresh Start for Companies

To battle the ongoing COVID-19 pandemic, the central government and the various state governments imposed a nationwide lockdown in India. Additionally, to arrest the spread of the pandemic, government authorities and corporates are promoting “work from home”, and wherever necessary to work with minimum work force. Acknowledging the difficulties faced by corporates on account of the threat posed by COVID-19, requiring social distancing in day-to-day functioning, governmental authorities have granted various exemptions and reliefs by issuing circulars and amending rules to ease compliance requirements to be complied by companies.

This blog analyses the recent reliefs and relaxations announced by the Ministry of Corporate Affairs, Government of India (MCA), and the Securities and Exchange Board of India (SEBI), which may have an impact on financing transactions.…

Continue Reading Social Distancing while approving financing transactions: MCA, SEBI Relaxations