Latest SC judgement uncovers Daiichi’s new approach – Fortis, IHH and, public shareholders under the gun for liabilities of Fortis’ erstwhile promoters
Public shareholders will need to brace for impact and be proactive – else risk getting the short end of the stick
Legal sanctity of the ‘theory of attribution’ possibly misplaced in the Fortis context…
Listed companies forced to publicly disclose deal details pending finalization of negotiations
Investors bereft of price and deal certainty, may even face reputational damage
Directors of listed companies may be liable for market manipulation and exposed to litigation if they publicly disclose a deal which then falls through…
No express framework exists for nominee directors to share UPSI with nominating shareholders
Natural expectation that nominee directors should represent their nominators’ interests – not permitted under law
Since nominee directors’ fiduciary duty remains towards the company and stakeholders, nominee directors are paradoxically placed and exposed to significant…
Transferring a majority-revenue generating business into a private subsidiary (hiving off) and raising funds at the subsidiary level is increasingly seen as a preferred alternative to direct listed acquisitions or slump sales
Hiving off may result in a ‘holding company discount’ and public shareholders lose out on value…
SEBI holds investors of AIFs having UPSI/ MNPI in breach of insider trading norms for investment decisions of AIFs
Investors into pooled investment vehicles exposed to substantial risk for actions beyond their control and visibility
Compliance seems rather impractical and creates complications for both the AIF and its investors – bad law that needs to studied for its potential implications…
