SEBI’s Administrative Circulars Outside SAT’s Appellate Jurisdiction: SC [Read Judgment]

The Supreme Court, in a recent judgment in National Securities Depository Ltd vs Securities Exchange Board of India, has held that “administrative orders such as circulars issued under the Securities Exchange Board of India (SEBI) Act are obviously outside the appellate jurisdiction of the Securities Appellate tribunal”.The court observed that action taken by Sebi in its administrative and legislative capacity cannot be appealed at the Securities Appellate Tribunal (SAT) i.e., the scope of power...

Decoding Interest Rate Options

Hola traders in finance! There is a new financial derivative introduced by Reserve Bank of India (RBI), effective from January 31,2017. Traders can now gain by speculating on interest rates as well. This will enable all domestic entitles that have underlying interest rate risk to hedge their risk by trading in newly christened derivatives.What are interest rate options? Typically an interest rate option is the one that derives its value form the change in interest rates. Before we delve into...

Informal Guidance or Informal Ordinance?

Preferential allotment of shares is the process by which a company increases its share capital base by issuing further shares to existing or new members. A company may be required to come out with preferential issue for a variety of reasons depending upon the circumstances such as for launching a new project, to meet company’s working capital requirements, to maintain debt-equity ratio or otherwise. In case the company which is desirous of making a preferential allotment of shares is a listed...

The Tata Episode: Corporate Governance And The Continuing Influence Of Promoters

It is generally understood that corporate governance norms ought to address agency problems between various actors in a company. Moreover, in companies with concentrated shareholding, the agency problems between controlling shareholders (referred to in India as “promoters”) and minority shareholders tend to be rampant, and hence corporate governance measures need to be targeted to address that agency problem. The corporate governance regime in India has considerably evolved over the last two...

SC extends Roy’s parole; asked to pay Rs 300 Cr more

Sahara group chief Subrata Roy secured a huge relief from the Supreme Court today when it extended till September 16 the parole granted to him on humantarian grounds following the death of his motherThe extension came with a condition that he has to deposit to Rs 300 crore with Security and Exchange Board of India (SEBI).It is to be noted that even on July 11 while extending his parole to today the special bench headed by chief justice T S Thakur had told Roy’s senior lawyer Kapil Sibal:"But you...

SCRA prevails over Contract Act and Sale of Goods Act: SC [Read Judgment]

Apex Court Bench comprising of Justices Anil R. Dave and R. Banumathi has held that the Securities Contracts (Regulation) Act, 1956 (SCRA) is a special law to regulate the sale and purchase of shares and securities and hence it prevails over the provisions of the Indian Contract Act, 1872 and Sale of Goods Act, 1930.This observation was made by the Supreme Court in Securities and Exchange Board of India vs. M/s. Opee Stock-Link Ltd. & Anr while disposing of appeals filed by SEBI against the...

Pay 300 Cr soon or go back to jail: SC to Subrato Roy

Sahara group chief Subrata Roy secured a huge relief from the Supreme Court today when it extended till August 3 the parole granted to him on humantarian grounds following the death of his mother. But there was a rider.There was a strict condition that he will have to deposit the balance of Rs 300 crore, out of the Rs 500 crore promised by him."But you remember you have to deposit balance Rs 300 crore. Either you pay or go back to jail," a bench headed by Chief Justice T S Thakur said while...

SC notice to CBI, SEBI on plea seeking seizure of P Notes

Supreme Court today issued notices to CBI, SEBI, RBI and the Finance Ministry for a direction to seize entire investments and gains made through participatory notes in India.The PIL was filed by advocate M.L. Sharma, who had already filed a PIL on Panama black money revelations, has filed this fresh application. On May 9, the SC had issued notice to the Centre and the CBI for an investigation against the Indians’ offshore account holders, and others. The notice was issued by a bench headed by...

Interplay between 15A and 15J of the SEBI Act: matter referred to Larger SC Bench [Read Judgment]

Division Bench of Supreme Court has referred a matter involving Interplay between the amended 15A and 15J of the SEBI Act before a larger bench. Bench comprising of Justices Kurian Joseph and R.F. Nariman in Siddharth Chaturvedi vs. SEBI said that it does not subscribe to the views in SEBI vs. Roofit Industries Limited ( 2015 (12) SCALE 642.)In Roofit Industries Ltd case, another Division Bench of the Apex Court had held that the quantum of penalty under Section 15A can have due regard only to...

#Budget2016; SARFAESI Act is to be amended to strengthen Asset Reconstruction Companies; Finance Minister

While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that in the financial sector, a comprehensive Code on Resolution of Financial Firms will be enacted. Together with the Bankruptcy and Insolvency Law, this will fill a major systemic vacuum. This is a major reform measure. Announcing more financial sector reforms, he said new derivative products will be developed by SEBI in the commodity derivatives market.  Statutory basis will be...

For Money Launders Jail is the Rule and Bail is an exception; Supreme Court [Read Judgment]

Supreme Court denies bail to Rose Valley Group CMD Gautam Kundu.By making a pragmatic approach to the provision of Section 45(1) of the P.M.L. Act and on consideration of the antecedents of the petitioner in collection of money from open market for issuing secured debentures in violation of the guidelines of SEBI and on further consideration  of the manner of keeping accounts of Rose Valley the Supreme Court rejected the Bail application, on 16th December, 2015.This appeal, by special leave, is...

RBI, SEBI, Gujarat and Jharkhand question SC interim order not making Aadhaar mandatory

Protests against the interim order not to make aadhaar cards mandatory for availing benefits of various government sponsored welfare schemes continued with the RBI and SEBI, along with the governments of Gujarat and Jharkhand today seeking clarifications and modifications from the Supreme Court on it.A bench of Justices J Chelameswar, S A Bobde and C Nagappan agreed to  hear the pleas on October 6. But it raised the question whether it can entertain such interim applications after transferring...