Investment Laws:

SEBI

Howey Trust

SEC vs W.J. Howey & Co. (1946)

To determine whether an instrument qualifis as an investment contract for the purposes of the
Securities Act.

SEBI order post facto open offer after 16 years.

Amalgamantion of private sector banks:

Directions, 2016

Under Section 44A of Banking Regulation Act, 1949

Private Banks and WBFC’s

Approval of 2/3 in value.

Ceiling of voting rights- 15% in private Banks.

SBI merger under Section 35 of SBI Act, 1955

Takeover code:

Clariant International Limited & Ors vs SEBi

SEBI vs Cabot International Capital Corporation

SEBI vs Shriram Mutual Funds

Demerger/merger of Emami, Zandu Pharmaceuticals and Emami Infrastructure.

FMGC business of Zandu to Emami

(fast moving consumer goods)

Zandu Reality to merge with Emami Realty

Assignment of IPR
Labour Laws:

Buyer to incur social security obligation,

Provident fund dues and gratuity.

-Industries Disputes Act

-Standing Orders Act, 1946

-Shops and Establishments Act

Maharasthra:

Balwant Rai Saluja vs Air India Limited

Test is a person is an employee or an independent contractor.

Monthly-Rated Workmen vs Indian Hume Pipe

Long prevailing benefits to employees cannot be revoked.

Sunil Kumar Ghosh vs K. Ram Chandra

Civil Appeal no. 9921-9922 of 2011

Workmen cannot be forced to work under another management.

S. 25F, IDA, RETRENCHMENT

S. 25FF, IDA, COMPOSITE SCHEME OF ARRANGEMENT

Airtel to absorb emploees of Tata Tele Services and pay spectrum related liability to the
government (cash free deal).

Ram Paresh Singh vs State of Bihar & Ors

Legitimate Expectations.

Payment of Gratuity Act, 1972-

If continuos employment over 5 years, 10 employers or more...

Bhola Nath Mukherjee vs State of West Bengal & Ors.

ACQUISITIONS:

Hindalco Aleris

World’s Largest Aluminium Group (2007 deal converning $ 6 bn)

Novelis $ 2.58 bn.

- $ 775 mn equity
- Rest in Debt

Break up fee to be paid to the acquirer by the seller of he were to back out. (termination fee)

Normally 1 to 3 % of deal value.

-Reverse termination fees

Buyers protection from break-up ( $3 bn cash & $ 1 to 3 bn in wireless spectrum)--- T.

Mobile & AT &T (break up fee if either back outfrom a deal).

Income Tax Act:

S. 72 A- Offsetting Losses

SEBI ( Takeover code)

Rajesh Toshimal vs SEBI

Akriti Global Traders vs SEBI

Austral Coke & Projects Limited

B.R Amoco Ple & SEBI, Mumbai H.C

Technip SA & Daiichi Sonkyo Co. Limited vs Jayaram Chigurepali & Ors

Swedish Match AB vs SEBI

Tata Tea Limited vs SEBI (2010)

NON-COMPETE FEE TO PROMOTERS:

R. 20(B) Takeover Code

Shouldnot exceed 25% paid to shareholders and seperate control premium to promoters.

- Revlon Doctrine in Company Law

- Revlon Duties
Revlon Incorporations vs MacAndrews holdings, Inc., 506, A. 2d 173 (Del. 1986)

Paramount Communications Incorporations vs QVC Network Incorporations, 637, A. 2d 828

(Del. 1993)

Business Judgment Rule.

Gimbel vs Signal Cos, 316A. 2D 599, 608 (Del. Ch. 1974).

Piramal-Abbot deal (U.S.D 3.72 bn) 2010

Income Tax Provisions for demerger

S. 47 (vib) of the IT Act, not regarded as transfer if the resulting compay is an Indian
company.

Carry forward & set off- S. 72A(40 of IT Act.

Slump Sale- assets held for more than 36 months long term capital gains (20%), less than 36
months short term capital gains (30%).

S. 68, 69(1)—Patent Act assails the patent.

Copyright Act:

Sections 8-19, Mode of Assignment

Section 37 of Trademarks Act register within.

Section 2(1)(b)- Assignment.

BHARATI AIRTEl ZAIN $7.9 bn (Bharati Airtel actually acquired Zain for almost $10.7 bn.

Indian Hotels LTD offer for Orient Express ($ 1.2 bn offer for).

Sun Pharma- Taro Acquisition:

1. Products
2. Market reach-Israel, Canad and U.S.

Sun Pharma

Coraco Pharmaceuticals Labs LTD

Excel Crop Care with Sumitomo Chemical India LTD.

Promoter holding 65%.

Public holding 35%.

Post merger, promoter 80%.

Post merger, public shareholders 20%.

Dilution to 75% required.

(at 1259.35 from promoter groups in July 2016)

One Britannia Bonus debenture of Rs. 60 held for every share held.

Listed/unlisted Company acquired primary acquisition.

Target company (listed):

Merger capital more than 80% consolidated net asset value sales to.

Tilagarh Wagons LTD

Cimmco Equity Holdings (P) LTD

Cimmco LTD
Etihad deal:
24% in Jet with near control clauses in the investment agreement.

SEBI: Notice for T.O Code.

Terms altered- Held T.O Code not applicable.

To subsidiaries with more than 25%.

Pricing:
Highest negotiated price of the acquisition.

52 weeks volume-weighted average price.

Highest price paid or payable within 26 weeks.

Investment mutual funds-front running-HDFC

3.35 crore of ilegal gains SAT order 2016 4th March.

Zenotech case
Zenotech Laboratories Limited

Daiichi- Acquired Ranbaxy-holding company of Zenotech

June 19 2009- offer to Zenotech Laboratories shareholders

Ranbaxy had become a subsidiary of Daiichi on October 20, 2008.

Ranbaxy had paid 160 per share to acquired Zenotech shareholders.
Daiichi was asked to revise the offer price to 160 from 113.62.

Value of intermediatory to the holding offer price Williamson Tea, Thomas Cook.

Volume weighted average price:

Net trade for a transaction= Price x No. of share traded ivided by No. of shares traded for a
day
Reliance Electric Generation & Supply LTD (REGSL)

- Electricity duty - & Tax- 2417.86 crores.

REL to pay Capital gain tax.

Maharasthra Electricity Regulation Commission (MERC)

- Definitive Binding Agreement Final Agreement

- Letter of intent, non binding preliminary document
- MoU (Binding) and LoI (Non-binding)
 Income Tax
- Exemption from capital gain to shareholders Section 47(vii)
- Exemption from capital gain to company 47(vi)

Section 72A- Carryforward of accumulated losses and unabsorbed depreciations.

Section 35DD- Cost of amalgamation is deductions of 1/5th each year.
Section 36(1)(vii)- Treatment of Bad debt.

Witholding tax for share purchase if seller is not an Indian Resident.

S-T Cap 40%

L-T Cap 20%
Indirect Transfers:
Vodafone-

C---C1—
| <50% assets...
B 2012 retrospective amendments...
Finance Act 2015

Rs. 100 mn & <50% < or = to

Slump sale/Asset sale

<36 months 20% normal rate...

>36 months

S.281, I.T Act- Sale void of tax proceedings are underway...

Obtain NOC from It Department...

AAA-Authority for advance ruling.

DIPP

Department of Industrial Policy & Promotion

FDI regulated by FEMA & FDA policy

FDI sector specific regulations
investment caps
prohibited

Automatic route
Approval route from the concerned ministry

More than 5000 crores prior approval of Cabinet Committee on economic affairs...
Listing Regulations/Agreements:

NOC from or observation letter from the stock exchange- R.37(1)

Role of stock exchanges:

Scheme to be filed one month before being filed one month before being filed clause 24 (f)
listing agreement.

Auditors statement under clause 24(l) of listing agreement.

Pre and post merger shareholdings...

S.66, Companies Act, 2013

Indian investment in JV abroad

400% of networth not applicable to earners of FE

(Competition Act (Section 29 (1))

Revisiting Dual Class stock,

68 St, John Law Review 863 (1994)

Sound, ethical & performance driven...

Transfer of Insurance business:

Insurance Act Section. 35, 36, 37

- Assignment of copyright- S. 18, 19, 19A

- Assignment of registered trademark- S. 37 to S. 45, S. 38
- Assignment with goodwill-total without for other products...
- Assignment of patents (Act), S.68, 69, 70
- Designs Act, S. 30
Competition Act:
S. 2(a)(b)
S. 5 Combination

Imp. Exp. Control.

R. 6 NW 43A

S. 28- Division of enterprise divestiture.

Penalties:
S. 42
S. 43A
S. 44
S. 53A- Appellate Tribunal 60 days...
NCLAT

Agreements:
1. Share Purchase
Disclosures, PIT
2. S. 17of the Contract Act
Daiichi-Ranbaxy
3. JV 50:50 Arrangements
Texas shootout...

Difficulty:

:IPR
: Sectoral Caps