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In April 2014, the Indian government introduced a detailed corporate social responsibility (“CSR”) regime as a part of the then newly introduced Companies Act, 2013 (the “Act”). As per Section 135 of the Act, CSR obligations apply to all companies, who, in the preceding financial year have a: net worth of at least INR5 billion…

The SEBI has permitted stressed companies to undertake a preferential issue at a price, which is the average of the weekly high and low of the volume-weighted average price (‘VWAP’) of its equity shares during the preceding two (2) weeks. In order to be eligible to avail of the foregoing relaxation, a stressed company must…

Distress Currently, the one word that best describes the situation of many Indian companies and businesses is “distress”. The two-plus months of a fairly stringent lockdown in most major Indian metros, including Mumbai (which contributes 6% of India’s GDP), has badly impacted several businesses. The measured relaxation of the lockdown feels like the aftermath of…

In 2018, the Indian government constituted a committee to review the Competition Act, 2002 (the “Competition Act”), and its rules and regulations.  On July 26, 2019, the committee released its report with various recommendations dealing with the functioning of the Competition Commission of India (the “CCI”), the merger control regime and on anti-competitive conduct. Currently,…

On July 31, 2019, the Indian government notified the Companies (Amendment) Act, 2019 (the “Amendment Act”), which amends certain provisions of the Companies Act, 2013 (the “Companies Act”).  While a large part of the Amendment Act covers the changes introduced by the ordinance effective from November 2, 2018, the Amendment Act has also incorporated certain…

On December 31, 2018, the Securities and Exchange Board of India (the “SEBI”) introduced several changes to the SEBI (Prohibition of Insider Trading Regulations), 2015 (the “Regulations”), which became effective on April 1, 2019.  They were introduced pursuant to the report of the Committee on Fair Market Conduct which advocated for tighter norms to prevent…

Recently, the Indian government has introduced several new reporting obligations under the Companies Act, 2013 (the “Act”) for Indian companies in respect of their registered office address and dealings with micro and small enterprises (“MSEs”).  Additionally, the reporting requirements for significant beneficial ownership have been revised.  This update discusses the implications of the new reporting…

In 2013, India adopted a new company law regime under the Companies Act, 2013 (the “Act”) and the rules there under, which have been amended from time-to-time. This update discusses the changes introduced by the Companies (Amendment) Ordinance Act, 2018 (the “Ordinance”) with effect from November 2, 2018.  As the Ordinance did not get approved…

In India, under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the “Takeover Regulations”), there exists a mandatory tender offer regime for acquisition of listed companies.  Under this regime, both, the acquisition of a substantial shareholding stake (25%) and the acquisition of “control” are treated equally, and require…

In 2006, the Indian government introduced the concept of a director identification number (“DIN”), and consequently, an individual could be appointed as a director of a company only if he or she had obtained a DIN.  A DIN is allotted by the Ministry of Corporate Affairs upon receipt of an application in a prescribed form…

Consolidated reporting form for foreign investment transactions On June 7, 2018, the Reserve Bank of India (the “RBI”) released a circular (the “Circular”) changing the reporting formats in all transactions involving issuance, or transfer of shares of Indian companies to foreign investors or vice versa.  Formerly, this was done by filing the Forms FC-GPR and…

The Companies Act, 1956 permitted inbound mergers, i.e., merger of a foreign company into an Indian company.  Even then, there were no foreign exchange regulations on inbound mergers.  A key change that was introduced by the Companies Act, 2013 (the “Companies Act”) was to enable outbound mergers as well, i.e., merger of an Indian company…

Introduction On January 10, 2018, the Indian government approved a number of amendments to India’s Foreign Direct Investment Policy (the “FDI Policy”) with a view to further improve the ease of doing business in India.  The reforms cover single brand retail trading, civil aviation, construction development, power exchanges and the medical devices sector.  In addition,…

India’s Companies Act, 2013 Over the last five (5) years, India has adopted a new company law regime under the Companies Act, 2013 (the “Act”) and the rules thereunder.  Since its implementation, the Act has been amended once in 2015, and various clarifications and amendments have been issued to the rules by the Indian government….

It is commonplace in global M&A deals for buyers and sellers to strongly negotiate the seller’s indemnity obligations, and many a times, unsatisfactory seller indemnities result in deals not going through.  Effective May 20, 2016, the Reserve Bank of India (the “RBI”) amended India’s foreign exchange regulations (the “FEMA Regulations”), and imposed a requirement to…