SEBI's Bright Line Tests for 'Control' - An Analysis -
'Control' is a term of wide connotation and, by its very nature, is not amenable to any precise standard definition of general application. What constitutes ‘control’ is most often a subjective test and is best determined on case to case basis. In India, the definition of ‘control’ has been subject to different assessments and has turned to be a grey area under the Takeover Regulations. Highlighting that there are several definitions available under different statutes/regulations, there could be a situation where a regulator may or may not rely on the interpretation given by other regulator to ascertain control, SEBI in its discussion paper has proposed two options - Framework for Protective Rights and Numerical Threshold. Discussing these options, the author is of the view that each of the options suffer from certain deficiencies both conceptually and operationally. It is stated that SEBI’s proposal to adopt a bright line test to ascertain ‘control’ for the purpose of Takeover Regulations is, undoubtedly, a substantial step towards improving the ease of doing business in India.
Notifications & Circulars
- Nomination of director - Approval from RBI not required for keeping deposits with an Indian company by persons resident outside India in accordance with Section 160 of the Companies Act, 2013
- New Foreign Exchange Management (Remittance of Assets) Regulations, 2016, fixing annual ceiling of remittance at USD 1,000,000, beyond which permission would be required from RBI, introduced
- Companies in banking, insurance, power sector, non-banking financial companies and housing finance companies exempted from filing financial statements in XBRL format.
- SEBI gives roadmap for disclosure of financial information in offer documents in accordance with Ind AS
- Stamp duty on inter-state amalgamations – Two orders of two different High Courts pertaining to the same scheme of amalgamation are independently different instruments, hence be liable to stamp duty independently – Full Bench of Bombay High Court
- Being a director, in a non-remunerative and non-executive position in other companies does not amount to being in employment of those companies or holding a place of profit there – Delhi High Court
- Principles of natural justice to be observed by Competition Commission of India while disagreeing with DG report – Competition Appellate Tribunal
- Penalty – Violation of Section 12A(b)&(c) of the SEBI Act and that of Regulation 3(c)&(d) of SEBI (Prevention of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 whether constitute one offence or two offences – Securities Appellate Tribunal observes that SEBI not in position to take a definite stand