| Relief for foreign investors |
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BS REPORTER New Delhi, 6 August Providing relief to foreign investors, the finance ministry has said non- resident taxpayers can give tax residency certificates (TRCs) to claim treaty benefits in any format, instead of a prescribed format sought earlier, along with a prescribed selfdeclaration form. In a notification issued on August 1, the Central Board of Direct Taxes ( CBDT) has given foreign investors the flexibility to make self- declaration of the information sought by Indian authorities if it is not part of a certificate issued by their resident country. According to the notification, the status of a foreign investor — whether individual or incorporated — nationality, and duration of tax residence could be declared by the investor himself in Form No 10F. The earlier rules required the government of a particular country to give details of residency in a prescribed format, which was difficult as every country has its own format. Investors raised concerns that it would be troublesome for them to get the TRC seeking too many details from their resident country. As India cannot dictate other countries to give TRC in a particular format, some countries wrote to the government seeking clarification. |
| Holcim- Ambuja deal under Sebi scanner |
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Mumbai, 6 August The Securities and Exchange Board of India ( Sebi), has begun the process of vetting the complex Holcim- Ambuja- ACC restructuring deal. Sources say Sebi is likely to question the companies involved on the valuation rationale, minority shareholders' interests and independent directors' opinion. This is after recent changes in the rules directing listed companies to seek Sebis approval for all merger, amalgamations or restructuring deals. "The recent circular gives Sebi powers to vet such transactions. The objective behind it is to see whether the structure is not anti- minority shareholders, valuations are not convoluted and whether the independent directors have acted in the right capacity," said a person with knowledge of the development. "Sebi is likely to ask question Holcim as to how it arrived at a ₹ 11,500 crore valuation for 50 per cent stake in ACC when the market value was much higher. And, about the ₹ 3,500- crore of cash moving out from Ambujas balance sheet," said a source. The Holcim restructuring, which involves a merger and stake transfer, is the first major deal after the merge and acquisition rules were amended by Sebi earlier this year. Previously, companies were able to execute such transactions by obtaining a no- objection certificate ( NOC) from stock exchanges and approval of a high court. Besides its clearance, Sebi has made it mandatory for companies to obtain a valuation report from an independent scrutiniser. Also, the transaction has to be put to a vote, where the resolution should receive more votes in favour of it than against it from public shareholders. The rules were tightened in February after some companies were found pushing ahead with deals which were not always in the interest of the public shareholders. Legal experts said with the new rules mandating multi- level clearances it isnt easy for companies to pass off anything. After Sebi's vetting, the deal will have to obtain an NOC from the stock exchanges. Later, the deal will have to be passed by public shareholders, by postal ballot or e- voting. After that, the company has to obtain a nod from the relevant high court, which will check if all approvals are in place. M& A DEALS NOW HAVE TO OBTAIN: |Sebi and exchange clearance |Valuation report from independent auditor |More than half the votes of public shareholders |High court approval Regulator to raise questions on valuation rationale, minority interest & other issues |
Moneycontrol news updates
Aug 06, 2013, 09.23 PM IST
Companies Bill introduced in Rajya Sabha
The much-awaited Companies Bill, which aims at protecting the interest of employees and small investors, was introduced in the Rajya Sabha today amid din
The much-awaited Companies Bill, which aims at protecting the interest of employees and small investors, was introduced in the Rajya Sabha today amid din.
Moving the bill for consideration and passage, Corporate Affairs Minister Sachin Pilot said the legislation is progressive and forward looking.
Discussion on the Companies Bill, 2012, will take place tomorrow.
The Bill was moved amidst uproar created by some Andhra MPs protesting against creation of Telengana state.
Also read: Monsoon Session: 43 bills to be taken up in Parliament
Lok Sabha had passed the legislation in December 2012.
The new legislation, which would replace the nearly 50-year-old Companies Act, would encourage companies to undertake social welfare voluntarily instead of imposing the same.
The proposed legislation would ensure setting up of special courts for speedy trial and stronger steps for transparent corporate governance practices and curb corporate misdoings.
The new law would require companies that meet certain set of criteria, to spend at least two per cent of their average profits in the last three years towards Corporate Social Responsibility (CSR) activities.
In case, entities are unable to comply with the CSR rules, they would be needed to give explanations. Otherwise, they would face action, including penalty.
The amended legislation also limits the number of companies an auditor can serve to 20 besides bringing more clarity on criminal liability of auditors.
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Company Secretary, Chennai
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