Articles & Updates

HomeArticles & Updates

Articles & Updates

Downstream Investments: Corporate Structuring Considerations Pertaining to FOCCs

Introduction India has a capital control regime, which regulates foreign equity and debt investments into India.  The FDI Policy conditions are implemented through various legislations, which include the Foreign Exchange Management Act, 1999 (‘FEMA’) and subordinate rules made under it such as the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (‘NDI Rules’). Foreign investors can enter the Indian market either directly through Foreign Direct Investment (‘FDI’) or indirectly.  Indirect foreign investment refers to investments received by an Indian entity…
September 23, 2024

Read more

SEBI’s Regulatory Overhaul: A Catalyst for Growth

Introduction The Securities and Exchange Board of India (‘SEBI’) has significantly overhauled its capital-raising regulations through the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2024 (‘Amending Regulation’), effective from May 18, 2024. The Amending Regulation, by virtue of the amendments it makes to the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (‘ICDR Regulations’), aims to simplify the capital-raising process, particularly for startups and small and medium enterprises (‘SMEs’). Relaxation…
September 3, 2024

Read more

Overseas Listing – Recent Development

Introduction Indian companies, typically, raise funds internationally through the issuance of depository receipts listed on foreign exchanges, by inviting non-residents to subscribe to offerings made within India, or through overseas borrowing.  Our previous article on external commercial borrowings explored the significant role of debt-driven capital flows in this context.  In this article, we will shift our focus to overseas funding by Indian companies through the listing of their shares on international stock exchanges. As capital markets become more global, companies…
August 13, 2024

Read more

Are Our Independent Directors Falling Short?

Introduction If recent SEBI orders are considered, the title, ‘guardians of corporate governance’ seems increasingly misapplied for a cross section of independent directors. SEBI orders consistently point out short comings in the actions of independent directors specifically while discharging functions as members of audit committee (“ACom”). Sebi’s Crackdown on Negligent Independent Directors An example of this can be seen in SEBI’s order in the matter of LEEL Electricals Limited (“LEEL”)[1]. While the order seems to suggest that all was not…
July 12, 2024

Read more

Understanding Continuous Service Under The Payment of Gratuity Act, 1972.

Introduction The concept of gratuity has long served as a means of acknowledgement and appreciation for employees’ unwavering commitment to their employment and employers. In accordance with the applicable provisions of the Payment of Gratuity Act, 1972 (‘Gratuity Act’), establishments/businesses like factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments that have had at least 10 (ten) employees in the preceding 12 (twelve) months are required to give gratuity benefits to their employees. This is done to…
June 25, 2024

Read more

Charting New Horizons: The EIMPA Ruling and Jurisdictional Joust of Shareholder Disputes

Introduction In the dynamic landscape of legal jurisprudence, where every ruling holds the potential to reshape precedents and redefine legal boundaries, a recent judgment by the division bench of the Calcutta High Court in Eastern Indian Motion Picture Association & Ors. v. Mr. Milan Bhowmik & Ors. (‘EIMPA Ruling’) marks a significant departure from conventional interpretations. In doing so, the division bench reaffirmed a Calcutta High Court single judge’s ruling in this regard thereby injecting a fresh perspective into the…
May 14, 2024

Read more

Does ‘Sale of Shares’ constitute ‘Sale of Undertaking’: The Perennial Conundrum

Introduction The subject matter of this article is a question that has often plagued the Indian courts.  Section 180(1)(a) of the Companies Act, 2013 (‘CA 2013’) places restrictions on the board of directors of a company in respect of selling, leasing or disposing of the whole or substantially the whole of the undertaking of the company.  It provides that in respect of such matters, a special resolution of the shareholders is a prerequisite before any action can be undertaken by…
April 24, 2024

Read more

Development of the Group of Companies Doctrine in Indian Arbitration Law: Insights from Cox and Kings Judgment

Introduction Arbitration, an alternative dispute resolution mechanism wherein parties consensually decide to submit a dispute between them, to an arbitral tribunal to the exclusion of domestic courts[1].   Arbitration provides a neutral, efficient, and expert process for dispute resolution at a single forum whose decision is final and binding on the parties.  The principle of party autonomy underpins the arbitration process as it allows the parties to dispense with technical formalities and agree upon substantive and procedural laws and rules applicable…
April 3, 2024

Read more

Decoding SARs: Shaping Employee Incentives in India

Employees play a pivotal role in driving an organization's growth.  Recent times have witnessed a surge in startups and a thriving e-commerce sector.  Consequently, this led to an increase in opportunities and an escalation in competition.  Given the fact that the talent pool to support the growth has been largely stagnant, companies have been forced to deal with a significant increase in employee attrition rates.  This, in turn, has led to companies to develop attractive remuneration packages and incentives, especially…
February 19, 2024

Read more

Sandbagging and Anti-Sandbagging Provisions in M&A Transactions

In the complex landscape of mergers and acquisitions (M&A) transactions, the interplay between a buyer[1] and a seller[2], before a transaction closes, shapes the negotiation of the underlying transaction documents. Sandbagging (or Pro-Sandbagging) occurs when a buyer in an acquisition/ investment knows about a breach of the seller's/ founders’ representations or warranties before the closing of the transaction but proceeds with the same anyway without raising any concerns or objections.  After the transaction is completed, the buyer/ investor might "sandbag"…
January 8, 2024

Read more

ACKNOWLEDGMENT

The rules of the Bar Council of India prohibit us from soliciting work or advertising. By proceeding further and clicking on the “Proceed to Website” button herein below, the reader acknowledges that they wish to know more about EVA Law. The reader further acknowledges that there has been no solicitation, invitation or inducement of any sort whatsoever from EVA Law or any of its members to create an attorney-client relationship through this website.

DISCLAIMER

This website (www.eva-law.com) is a resource for information purposes only and is intended, but not promised or guaranteed, to be correct, complete, and up-to-date. EVA Law does not warrant that the information contained on this website is accurate or complete, and hereby disclaims any and all liability to any person for any loss or damage caused by errors or omissions, whether such errors or omissions result from negligence, accident or any other cause.  Any information obtained or downloaded from this website is completely at the user’s volition and any transmission, receipt or use of this website would not create any attorney-client relationship.

Proceed to Website Cancel