Corporate Professionals Blog

Vide notification dated March 26, 2013, SEBI has made the following amendments in SEBI (SAST) Regulations, 2011 considering the observation raised during the implementation of Regulations since their notification: Clarification on reckoning the period of ninety days in case of increase of voting rights due to buyback by Target Company. Prior to the present amendment, if the voting rights of a shareholder go beyond the prescribed threshold limit on account of buyback by the target company, the open offer requirement will not be triggered if voting rights are brought below the threshold limit within ninety days from the date on which the voting rights so increase. However, if the voting rights are not reduced below the level at which the requirement of Open Offer was triggered, then the public announcement is to be made not later than ninetieth day from the date of such increase in the voting rights beyond the relevant threshold. Through this amendment, it has now be...

With a view to incorporate transparency and to remove any scope of unfairness to investors seeking arbitration, the Securities Exchange Board of India vide its circular CIR/MRD/ICC/8/2013 dated 18.03.2013 has notified the introduction of an automated process in the existing arbitration mechanism available through Stock Exchanges. This innovated mechanism shall replace the process of appointment of Arbitrator that is currently being followed at the Stock Exchanges. The summary of the changes to be incorporated by the Stock Exchanges in this regard are as follows: Ms. Deepika Vijay Sawhney Partner +919818316936 deepika@indiacp.com 1. ‘Common Pool'' of Arbitrators : SEBI has suggested that the list of arbitrators on the panel of every stock exchange which has nationwide terminals shall be consolidated and be called a ‘Common Pool’. This pooling of the names shall be done centre wise so that any applicant from within the region covered by that centre can choose an a...

The Ministry of Corporate Affairs vide its General Circular No. 06/2013 dated 14.03.2013, has issued a clarification with respect to Section 372A (3) of the Companies Act, 1956 that prohibits lending of money to Bodies Corporate at a rate lower than the prevailing bank rate.  The Union Budget 2013-14 allows the Central Government to raise Rs. 50,000 Crores in the form of Tax Free Bonds which carry a lower rate of interest (presently 6.75% to 7.5%) which is tax free under Sections 10(15) (iv)(h) of the Income Tax, 1961. Such a provision was also made in Budget 2012-13 but it received poor acceptance owing to restrictions posed by Section 372A (3) of the Companies Act, 1956. The Ministry of Finance therefore drew the attention of MCA to the said section in order to remove bottlenecks in effective implementation of this provision.

As per the current regulation on export of goods and services, Every Indian exporter is required to get its proceeds realized within 12 months from the date of export. Indian foreign trade policy provides relaxation to the exporters saying that realization of export proceeds shall not be insisted under any of the export promotion schemes under this Foreign Trade Realization Policy, if the Reserve Bank of India (RBI) writes off the requirement of realization of export proceeds on merits. Mr. Manoj Kumar Vice President +919910688433 manoj@indiacp.com For write-off of unrealised export bills, Reserve Bank of India has stipulated different limits which have been revised by the RBI vide its circular No. 88 dated March 12, 2013 given as follows:

SEBI, at its Board Meeting held on 8th March 2013 inter alia approved the Regulations for issuance and listing of non-convertible redeemable preference shares. Key highlights of the same are: Ms. Anjali Aggarwal Vice President +919971673336 anjali@indiacp.com 1. Approval of the Regulations for issuance and listing of non-convertible redeemable preference shares. Key highlights of the same are: The Regulations shall be called SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013. The Regulations aim to provide a comprehensive regulatory framework for not only public issuance of non-convertible redeemable preference shares but also listing of privately placed redeemable preference shares.

Mr. Chander Sawhney Vice President +9810557353 chandeer@indiacp.com Hon’ble Finance Minister Shri. P. Chidambaram on 28.02.2013 presented the Union Budget 2013 and mentioned that slowdown in Indian economy has to be seen in the context of slowing global economic growth. He admitted that the country’s present situation and growth is indeed challenging but India has potential growth rate of 8 percent and getting back to this is possible as has been proven in the past. The central theme now is “higher growth leading to inclusive and sustainable development” with emphasis on women, children, minorities, backward classes and disabled persons. Impetus has also been given to create opportunities for youth for skill development. Health, Education, Rural, Manufacturing, Infrastructure and affordable housing have been kept on the priority list. Capital Markets initiatives like strengthening SEBI for Investor protection and fine tuning FDI/ FII norms has also been touched upon.