– Subhojit Shome, Assistant Manager | subhojit@vinodkothari.com
Click here to view our: Consultancy and advisory services on Digital Personal Data Protection Act, 2023
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Vinod Kothari, Managing Partner | corplaw@vinodkothari.com
The spate of new disclosure requirements introduced by Reg 30 of the Listing Regulations includes one of the most controversial pieces – disclosure of shareholders’ agreements which may impact or are designed to impact the management or control of a listed entity. This requirement is applicable not only to the pacts entered into after the effective date of the amendment, but also to existing agreements, which, by reg. 30A, need to be bared by the contracting parties to the company, and the company in turn, will need to upload this information to the public. There are views circula that the entire body of such agreement has to be made public.
We cannot miss the fact that a sizeable portion of the capital of listed companies in India is held by families. An OECD document says nearly half of the listed companies’ capital in India is held by promoter families.
Naturally, anything that pierces, peeps in or lifts the veil of family arrangements is as challenging as any attempt to get into anyone’s privacy. Note that privacy concerns are not in any way less important for promoter families, than for yours or mine.
Therefore, evidently, this issue has raked up a lot of controversy. Compliance Officers are even facing the query as to whether a will is also required to be disclosed.
Read more →Team Corplaw | corplaw@vinodkothari.com
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– Vinod Kothari | corplaw@vinodkothari.com
If the intent of CSR provisions coded in the law was to promote socially responsible conduct on the part of companies, that lesson of responsibility is being taught the very hard, indiscriminately harsh way – by imposing penalties of 2X of the amount involved in CSR breaches, even if the breach was a pure timing mismatch. By now, there are several such adjudication orders – purely as an example, is where the order clearly notes that there has been no failure on the part of the company to spend the failed amount of Rs 14.50 lacs. The amount was indeed spent, as intended for “ongoing projects”, but there mere segregation of this money into a separate bank account, required to be done within 30 days, was missing. Applying the provisions of sec. 135 (7) which provides for a “penalty of twice the amount” which failed the segregation requirement, though it did not fail the spending requirement.
There are several points that arise here: segregation of the amounts meant to be spent for ongoing projects is merely a ring-fencing requirement, such that companies are aware of the purpose for parking the money, and such money is indeed not commingled with the company’s own funds. If the funds are indeed spent for the purpose for which they are to be segregated, the failure to segregate is, at the most, the failure of the method and not the ultimate result. The failure was transient, and only a timing issue, and not a substantive failure. Therefore, even if punishable, the punishment could not have been the maximum amount provided by the law.
Read more →– Palak Jaiswani | corplaw@vinodkothari.com
Apparently with a view to make disclosure more stringent and widen the scope of disclosures, SEBI introduced two new clauses pertaining to regulatory actions, as clause 19 and 20, in Schedule III.A.A, as a part of SEBI (Listing Regulations and Disclosure Requirements) (Second Amendment) Regulations, 2023, with effect from July 14, 2023.
Newly inserted clauses 19 and 20 in Para A Part A of Schedule III cover the regulatory and similar actions which are required to be disclosed irrespective of the materiality thresholds prescribed.
There is a huge confusion as to what sort of regulatory actions are to be covered in item 19 and 20. Trivial fines and penalties have begun coming up on stock exchange reporting. Hence, it is very important to ascertain the type of regulatory actions that fall within the ambit of either of these two clauses. This article intends to understand the scope and coverage of the aforesaid clauses.
Read more →| On request of several of our participants, we are postponing the workshop to the 28th of July, 2023, Friday, 4pm-7pm. Register now at : https://forms.gle/emHhuy6rNdhfCtbo7 |
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Vinod Kothari and Nitu Poddar (corplaw@vinodkothari.com)
– Updated February 02, 2024
Come June 1, 2024, top 100 listed companies, and thereafter, effective from December 1, 2024 top 250 listed companies, will have to mandatorily respond to market rumours, and cannot keep a policy of maintaining their own silence. What is the intent and scope of this requirement? Does this requirement expect companies to scan through more than 100000 mainstream media publications, and news channels and innumerable investor influencers, keep searching for the written or spoken word about the company, and then keep responding to all the din about the company? Or, the intent is just to ensure that a false market in the company’s securities is not being created or propped up by the company’s silence? And if the company is to respond to rumours, how and where does it respond?
These are some very pertinent questions bothering the larger of the listed entities. We are trying to address some of these questions below.
Read more →– Palak Jaiswani | corplaw@vinodkothari.com
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– Payal Agarwal, Manager (payal@vinodkothari.com)
The consequences of climate change and the need for a positive climate action need no introduction in the present world. What once remained a matter of concern for the so-called “environmental activists”, gradually traveled their way to the government as countries committed towards achieving “net zero”. Climate action requires involvement of the masses, and therefore, the government is coming up with new regulatory devices towards developing climate action on a large scale.
India is no exception to the same, and following the footsteps of other countries, has proposed to develop a compliance mechanism and domestic market for carbon credits in India. Regulatory inclusion is provided to carbon credits in India by way of an amendment to the Energy Conservation Act, 2001 (“ECA”). Carbon credits are a form of emission trading schemes (ETS), that incentivize the reduction in emissions, against the offsetting of higher emissions by other market participants. A brief comparison of the domestic ETS in other parts of the world, and the existing emissions trading markets in India can be referred to at Emission law amendments: Laying the framework for Carbon trading market in India.
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