Category: Corporate and Finance
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Navigating the murky waters – SC redefining the scope of mens rea in insider trading cases
With regard to India’s Insider Trading regime, it is governed by the SEBI (Prohibition of Insider Trading) Regulations, 2015 [superseded SEBI (Prohibition of Insider Trading) Regulations, 1992]. Owing to the difficulties faced by the regulator (SEBI) in identifying the instance of insider trading and the same being totally based on circumstantial evidence, the investigation of…
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Can DVRs (Differential Voting Rights) save the Founders of Tech Startups?: A critical analysis on whether DVRs can be used as a tool to retain control by promoters
The news of Ashneer Grover’s resignation is being added to the list of celebrated promoters of tech startups who lost control over the very companies they founded. The list also includes Binny and Sachin Bansal of Flipkart. Whether or not the allegations against Ashneer are true, it is certain that founders of tech startups have…
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Non-waiver Clauses: Effective in case of Silence?
INTRODUCTION In the law of contracts, ‘waiver’ is a term used to define the forbearance of right where one party voluntarily agrees to grant a concession to the other contracting party with regards to the performance of a contract. In India, Section 63 of the Indian Contracts Act 1872 contains the provision that deals with…
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Director’s Duties and Current Relevance in India
During the debates preceding Companies Act (CA), 2013, the Corporate affairs Minister Mr. Pilot termed the bill as ‘historic feat’ that will ensure ‘more compliance and less regulation.’ This was especially correct when section 166 of ‘The Companies act, 2013 was taken under consideration. The CA, 1956 did not explicitly stipulate any directors’ duties. Notably,…
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Equity to Preference Share Conversion: Tenable reorganization or backdoor reduction of capital?
Regulatory framework: The Companies Act, 2013, section 66, section 230. Introduction: Every company limited by shares may structure its share capital into equity and/or preference shares, representing the underlying value of the company.[1] They are issued as separate classes of shares, assuming distinct natures and fiscal weightage. Equity shares constitute the foundation capital of a…
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SPACs: A Backdoor Lifeline for Indian M&A
In the year 2020, the US saw a huge surge in Special Purpose Acquisition Company (SPAC) activities amounting to $83 billion raised from 247 SPACs, which is 50% of the capital that all the initial public offerings (IPOs) raised in the year. This was followed by a record-breaking 189 SPAC IPOs being announced in just…
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