SEBI’s Proposed Disclosure Regime: Impact on Public M&A and Directors’ Liabilities

  • Most proposals are well thought through – unintended impact in a few cases
  • Mandatory clarification of media rumours – M&A dealmaking compromised and potential creation of a false market?…

    What’s Holding Back Indian Fund Managers From Raising Global Capital?

    • Indian fund managers, thus far restricted, may now be able to setup India-focussed offshore funds
    • Is investment by resident individuals in offshore funds now restricted, even under LRS? Not quite – we address the ambiguity
    • Will GIFT now emerge as the most favoured jurisdiction for setup of India-focussed funds?…

      Unexplored Strategies in the Fortis Saga: Public shareholders and IHH Healthcare exposed to significant collateral damage?

      • 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…

        Revamped Overseas Investment Regime (Part I) – A Rational Overhaul

        • Round tripping no longer illegitimate – doors open for externalisation and de-SPAC transactions
        • Definitional clarity on direct investments and portfolio investments
        • Indian GPs get a glidepath to setup offshore pooling structures…

          Decoding Boardroom Dilemmas (Part III): Can Nominee Directors Share UPSI with Nominating Shareholders?

          • 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…

            Private Credit: Interest on NCDs recharacterized as dividends 

            • Tax authorities recharacterized interest income on NCDs as dividends
            • Interest recharacterization has not taken place under GAAR
            • Investors can prevent such mischaracterization by demonstrating the nature of the underlying instrument, periodicity of payments, maturity date, management rights,

              Decoding Boardroom Dilemmas – Hiving Off to Fundraise Through Subsidiaries – Commercial Wisdom or Short-Changing Public Shareholders?

              • 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…

                Top 5 Tax Considerations When Structuring Debt Investments in India

                • Recent developments in the Indian tax regime have brought India closer to global
                  norms though hybrid instruments that have come under increased scrutiny

                • GAAR provisions have enabled tax authorities to examine the commercial substance of transactions, underscoring the importance of purpose, pooling, and people…

                  Structures and Considerations for Offshore Debt Funding

                  Special situations and private credit funds have been increasingly looking at the high yield Indian market. With banks facing liquidity and risk issues, alternate capital with customised solutions seem attractive. Structured commonly through collateralised redeemable bonds with pay-outs deferred until maturity, these bonds may have equity kickers built-in as well, in the form of redemption premium linked to any variable, such as underlying equity share price or cashflows. While offshore capital is interested, currency, tax withholdings, enforceability and regulatory risks dampen the return profile on a risk-adjusted dollar return basis…


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