Holds 98-years lease deed prejudicial, but precludes 1% shareholder from challenging share-allotment
CLB in a Sec 397/398 petition, observes that respondent co. leased out its properties to the detriment of the co., notes non-deduction of TDS by tenants, execution of lease deed for 98 years, subsequent cancellation of deed; Observes that co's affairs have been mismanaged, in order to benefit the respondent directors, thus, appoints an independent auditor to ascertain whether actual rental income was deposited in cos.' accounts; However, with respect to petitioner's (minority shareholder) complaint that co's properties were let out on unreasonable low rent, holds it as untenable, being commercial, could not be entertained u/s 397/398; Further rejects petitioner's contention that co. indulged in act of oppression by converting unsecured loans into equity shares in favour of respondents, thereby, reducing petitioner's shareholding from 1% to 0.13%, absent proof to show malafide intention in such additional allotment; Also observes that a shareholder holding only 1% shares is not entitled to contend that such allotment was made to reduce her to minority or oust her from control of management :Mumbai CLB
The order was passed by Shri. Ashok Kumar Tripathi (Member, Judicial).
Advocate J.M. Shah argued on behalf of the petitioner, while Advocates Gaurav Mehta and Rohan Agrawal represented the respondents.
IPAB disposes trademark dispute between Chivas & Shiva; SEBI to soon unveil e-IPO norms
IPAB disposes trademark dispute between Chivas & Shiva; SEBI to soon unveil e-IPO norms
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US SC: Upholds "Brulotte" rule on royalty entitlement post patent expiry; Chief Justice dissents
US Supreme Court, by a 6-3 verdict, upholds its earlier patent ruling in Brulotte v. Thys Co. ('Brulotte'), wherein it was held that a patentee cannot continue to receive royalties for sales made after his patent expires (statute fixes such period as 20 years); Respondent Marvel Entertainment's corporate predecessor agreed to purchase petitioner Stephen Kimble's patent for a Spider-Man toy, in exchange for a lump sum plus a 3% royalty on future sales and no end date for royalty was set; Petitioner contended that the Court should abandon Brulotte's bright-line rule in favor of a case-by-case approach based on anti-trust law's "rule of reason" and contended that Brulotte hinged on an economic error, i.e., an assumption that post-expiration royalties are always anticompetitive; Majority opinion, authored by Justice Elena Kagan holds that, "assuming Kimble is right that Brulotte relied on an economic misjudgment, Congress is the right entity to fix it. The patent laws are not like the Sherman Act, which gives courts exceptional authority to shape the law and reconsider precedent based on better economic analysis"; Holds that, "Patents endow their holders with certain superpowers, but only for a limited time. In crafting the patent laws, Congress struck a balance between fostering innovation and ensuring public access to discoveries"; Majority opinion emphasizes on doctrine of stare decisis, states that, "Application of that doctrine, though "not an inexorable command," is the "preferred course"..What we can decide, we can undecide. But stare decisis teaches that we should exercise that authority sparingly"; Further stating that "as against this superpowered form of stare decisis, we would need a superspecial justification to warrant reversing Brulotte", Justice Kagan points out that the patent statute remains unchanged, thus overruling Brulotte is unjustified; However, Justice Alito's dissenting opinion highlights economic principles, states that patent holders and licensees are often unsure whether a patented idea will yield significant economic value, and "it often takes years to monetize an innovation. In those circumstances, deferred royalty agreements are economically efficient"; Dissenting minority further observes, "Brulotte's only virtue is that we decided it. But that does not render it invincible. Stare decisis is important to the rule of law, but so are correct judicial decisions...A proper understanding of our doctrine of stare decisis does not prevent us from reexamining Brulotte"
Click here to read the United States Supreme Court ruling in Kimble vs Marvel Entertainment. Justice Elena Kagan wrote the majority judgment and was joined by Justice Scalia, Justice Kennedy, Justice Ginsburg, Justice Breyer & Justice Sotomayor. Justice Samuel Alito authored the dissenting opinion and was joined the Chief Justice & Justice Thomas.
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Impounds Rs 2 cr unlawful gains derived from insider trading; Expedites issue of notice
SEBI impounds unlawful gains of around Rs 2 cr made by third parties ('suspected entities') by trading in the scrip of Sabero Organics Gujarat Ltd ('target co.') which was being acquired by Coromandel International Ltd ('acquirer'), based on unpublished price sensitive information (UPSI); Notes that acquisition of Sabero was a price sensitive information, which was passed on by Chairman of acquirer co. and Mr. Murugappan (Chairman of Murugappan Group) who was connected with Chairman of acquirer co; Observes that suspected entities (which included an HUF) shared personal relations with each other and deviated from their usual pattern of trading; Observes that 'Mr. A. Vellayan and Mr. A.R. Murugappan were sharing personal relationship and in all possibilities communicated the UPSI to Mr. A.R. Murugappan, which was shared to Mr. Gopalkrishanan C"; Holds that, "the funding to Mr. Gopalkrishnan C. (suspected entity) through layered transactions by person connected with the Chairman of Coromandel, prima facie..was based on the knowledge of UPSI...passed on from Mr. A. Vellayan and Mr. A.R. Murugappan", and directs SEBI to expedite the process of issuing show cause notice against suspected entities :SEBI
Restrains HBJ Capital from acting as Investment Advisor, as unregistered under SEBI Regulations
SEBI directs HBJ Capital and HBJ Capital LLP to cease & desist from acting as an Investment Adviser and Alternative Investment Fund, as not registered with SEBI under SEBI (Investment Advisers) Regulations, 2013 & SEBI (Alternative Investment Funds) Regulations, 2012 respectively; Refers to HBJ Capital's website, observes that HBJ Capital and its directors gave trading tips, stock specific recommendations, etc. to the investors on a contractual basis on payment of fees which fall within the definition of activities of "investment adviser" under SEBI Regulations; Notes that HBJ Capital failed to provide the returns promised and also did not refund the money invested by the investors/clients, thus holds that, "it is apprehended that investors at large could be misled and the moneys invested by the investors are at risk on account of such unauthorized activities of unregistered entities"; Further observes that HBJ Capital and its directors through its group entity, viz. HBJ Capital LLP is pooling funds from HNIs with an objective of generating profits from investments made in the securities market, without obtaining registration from SEBI; Refers to the data furnished by the stock exchanges, observes that HBJ Capital LLP has carried out transactions on Stock Exchange platforms through various Stock Brokers such as India Infoline Ltd., Sharekhan, Angel Broking and Edelweiss Broking. Holds that, "trades and bank transactions executed by HBJ Capital LLP leads to the inescapable conclusion that HBJ Capital LLP is continuing its activity of pooling funds from investors/partners and investing the same in securities market for the benefit of its investors/partners ", for which SEBI registration is must:SEBI
SEBI observes unfair-trade practices by sub-broker, acting in collusion with other intermediaries
SEBI observes violation of Prevention of Fraudulent & Unfair Trade Practices Regulation (PFUTP) & Broker Regulations by sub broker, Money Magnet Securities ('noticee'), however, since noticee has been prohibited from dealing in securities for a period of five years for the same violation in 2013 & its registration certificate was cancelled, no further penalty is imposed; Observes that various market intermediaries acting in collusion traded in 12 various scrips, viz., Allcargo Global Logistics Limited, Asian Star Company Limited, KSL & Industries Limited etc through the trading terminal of Money Magnet; Notes that that the connected entities, while acting in collusion with Money Magnet were "interested in creating artificial volumes in the aforesaid scrips and in the process the orders placed by them also influenced the price of those scrips"; Thus, holds that noticee, while acting in collusion with others, aided and abetted in manipulations, created artificial volumes and also influenced price of various scrips, thereby violated PFUTP Regulations and Code of Conduct for sub-brokers under Brokers Regulations:SEBI
SEBI issues FAQs on Debenture Trustee
SEBI issues FAQs on Debenture Trustee
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SEBI issues ESOP processes/disclosure requirements
SEBI issues processes / disclosure requirements under SEBI (Share Based Employee Benefits) Regulations, 2014 for listed cos while exercising employee stock options programmes (ESOPs); Compensation Committee is required to formulate the detailed terms and conditions of the schemes; Provides for contents of explanatory statement to the notice and the resolution proposed to be passed for the schemes in general meeting; Also stipulates the information to be filed with Stock Exchanges
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SEBI enables capital raising by start-ups through Institutional Trading Platform
SEBI Board simplifies framework for capital raising by technological start-ups and other companies, enables capital raising by technological start-ups and other companies through Institutional Trading Platform (ITP); Only two categories of investors, i.e. (i) Institutional Investors (QIB as defined in SEBI (ICDR) Regulations, 2009 along with family trusts, systematically important NBFCs registered with RBI and the intermediaries registered with SEBI, all with net-worth of more than Rs. 500 crore) and (ii) Non-Institutional Investors (NIIs) other than retail individual investors can access the proposed ITP; Minimum application size shall be Rs. 10 lakhs and number of allottees in case of a public offer shall be 200 or more; No person ( individually or collectively with persons acting in concert ) to hold 25% or more of the post-issue share capital; Relaxes disclosure requirements for such cos, including valuation parameters, basis of issue price etc
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SEBI approves fast track route for further capital raising by listed cos
In order to enable more number of listed companies to raise further capital using fast-track route, Board reduces minimum public holding requirement from Rs. 3000 crore to Rs. 1000 crore in case of First Public Offer and to Rs. 250 crore in case of rights issue; In order to prevent misuse of funds during the interim period pending utilization by the issuer, for funds raised through public / rights issue, the Board decides that net Issue proceeds pending utilization shall be deposited only in the Scheduled Commercial Banks
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SEBI approves regulatory framework for reclassification of promoters as public
W ith respect to reclassification of promoter as public, SEBI Board approved a regulatory framework, whereby when a new promoter replaces the previous promoter subsequent to an open offer or in any other manner, re-classification shall be permitted subject to approval of shareholders in the general meeting; Outgoing promoter can't hold more than 10% shares of the company; In case of transmission/succession/inheritance, the inheritor shall be classified as promoter; Existing promoters may be re-classified as public in case the company becomes professionally managed and does not have any identifiable promoter
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SEBI reviews offer for sale of shares through stock exchange mechanism
To ensure increased retail participation in Offer for Sale of Shares (OFS) through Stock Exchange mechanism, OFS notice shall be continued as per present practice i.e. latest by T-2 days, however, T-2 day shall be reckoned from banking day instead of trading day; To simplify the bidding process for retail investors, it would be mandatory for the seller to provide the option to retail investors to place their bids at cut off price (default option) in addition to placing price bids
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Honda Applies For Trademark; Wipro Enterprise moves HC against Heinz; CCI slaps fine on Kerala based film associations
Honda Applies For Trademark; Wipro Enterprise moves HC against Heinz; CCI slaps fine on Kerala based film associations
Directs public announcement for share acquisition, rejects Regional Director approval defence
SEBI directs promoters of target co., Vision Cinemas Ltd., to make public announcement of share acquisition (by way of preferential allotment), as it resulted in increase in individual & collective shareholding beyond the threshold limit, and pay 10% interest alongwith consideration for delayed announcement; Rejects noticees' contention that since alleged share allotment was approved by Regional Director, MCA, it was exempt under Takeover Regulations from open offer requirement; Observes that Regional Director's approval was not sought pursuant to a scheme of arrangement, as required under Regulations, but was an approval of a contract which could be entered into only with prior approval of Regional Director as required under Companies Act, 1956; Further rejects noticees' contention that preferential allotment was made without receiving in-principle approval from BSE and shares allotted to them were not yet credited to their demat accounts, thus, since shares were technically not allotted to them, no public announcement open offer could be made, holds that, "if a person agrees to acquire shares / voting rights or control over the target company, he becomes an acquirer to make public announcement"; On noticees' submission that they had not yet exercised their voting rights, observes "It is the entitlement to exercise voting rights which triggers the obligation under those regulations and not the actual exercise of voting rights or availing of other rights such as dividend, etc"; Relies on Bombay HC ruling in B. P. Amoco Plc. Vs. SEBI & SAT ruling in Shri Sharad Doshi vs. The Adjudicating officer and others:SEBI
The order was given by Shri Rajeev Kumar Agarwal.
Penalises film-exhibitors association; Insistence on "modern facilities", excuse to favour select theatres
CCI imposes penalty on Kerala Film Exhibitors Federation (opposite party, OP-1) of around Rs 56, 134 (7% of Average Turnover) and Rs. 45,189 penalty of Film Distributors Association (Kerala) (opposite party, OP-2) for entering into anti-competitive agreement, restricting release of new movies in certain theatres (members of informant, Kerala Cine Exhibitors Association); Notes that the agreement stipulated that only theatres having modern facilities like - AC, cafeterias, toilets, Digital theatre systems would get new movie releases; Observes that "modern facility plea taken the OP- 1 was a ruse as many theatres of the members of OP-1 which did not have these facilities were getting new releases whereas many theatres of the members of the Informant which have these facilities were denied new releases. Even otherwise, the Act condemns such decisions taken by the associations which limits/ restricts the supply of goods/ services and affects competition in the market."; States that trade associations provide a forum for entities working in the same industry to meet and to discuss common issues, however, "when these trade associations transgress their legal contours and facilitate collusive or collective decision making, with the intention of limiting or controlling the production, distribution, sale or price of or trade in goods or provision of services by its members, it amounts to violation of the provisions of the Act"; Rejects OP-2 claim that to protect commercial interest of its members, it had to succumb to diktats of OP-1 as members of OP-1 were revenue yielding districts; Holds that such claim "can at best be a mitigating factor while prescribing penalty in the instant matter. The same cannot absolve OP- 2 of its liability under the Act"; However, with regard to allegation on Kerala Film Producers Association (OP-3, who entered into the alleged agreement with OP-1 & OP-2), observes that it is an association of producers and producers do not appear to have a direct role in the distribution of movies; Also observes that though OP-3 signed the agreement with OP-1 and OP-2, it did not comply with the decisions taken therein, thus, no anti-competitive conduct by OP-3 :CCI
The ruling was delivered by Shri. Ashok Chawla (Chairperson), Shri. S. L. Bunker, Shri. Sudhir Mital, Shri. Augustine Peter, Shri. U. C. Nahta and Shri. M. S. Sahoo (Members).
Advocates Harshad V. Hameed, Pradeesh Chacko, Arvind Gupta, S. S. T. Subramanian, Debopriyo Pal, Santosh Paul and Mr. P. V. Basheer Ahmed argued on behalf of the opposite parties.
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