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Corporate Law Cell @ Corp

Speak
CRUX
 The week that was …

 Follow up

 SEBI Takeover Code

 Tata, Bye – Bye

 Disaster in high seas

The week that was….

Banking
RBI has decided The banking regulator Further Reading –
to cap FDI in new (RBI) has plans to
private sector approve a limited RBI Discussion Paper
bank to below 50 number of banking
rbidocs.rbi.org.in/rdocs/content/
% from 74 % licenses in line with
now. (TOI FM’s budget speech.
PDFs/FIDIS110810.pdf
Business, 12th
(Read More).
August, 2010)
(Economic Times,
12th August, 2010)

Corporate Law Cell Newsletter Volume 1 Issue 2

© Corporate Law Cell. 2010. ALL RIGHTS RESERVED
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Telecom Patent

3G Implementation Black – Buried? Mumbai based Lupin, has sued

Delayed!!! Ranbaxy Labs in the US District
India likely to block Court for the Eastern District of
Be MNP (Mobile blackberry services Pennsylvania, over patent
Number Portability) says officials from infringement over cholesterol
compliant before Ministry of Home lowering Fenofibrate capsules traded
starting service says Affairs. (TOI under the name Antara.
DoT (Department of Business, 12th August,
Telecom). (TOI 2010)
Business, 12th August,
2010)

The Big Bother Others

Meeting of Federal Reserve Relaxation of Free Float Airport fee rejig to

Policy Makers on Tuesday at
Washington resulted in them
keeping the benchmark rate
unchanged in the range of 0 –
0.25 % which has remained
so since December 2008.
(Economic Times, 11th
August, 2010)
Quote of the Week –
“The true entrepreneur
is a doer and not a
dreamer”
…… Nolan Bushnell
(Business Today, 22nd
August, 2010)
requirement – If the latest hit developer’s
communiqué of the Ministry of profit margins –
Finance are to be believed it has Civil Aviation
brought some exemption from the ministry has
earlier norms introduced on 4th June, decided to adopt a
2010. The latest announcement hybrid model
provides for 25% public requiring airport
shareholding may be achieved over developers to cross
a three year time period, without – subsidise airport
requiring an annual addition of 5% user charges
public holding and the public through earnings
shareholding requirement for public from non –
sector enterprises (PSEs) has been aeronautical
dropped from 25% to 10%. revenues. (Financial
(Financial Express & Corporate Law Express, 7th August,
Blog, 10th August, 2010) (Read 2010)
More).
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Terms that Matter –

Cash Reserve Ratio (CRR) – is a central bank regulation that sets the
minimum reserves each bank must hold to customer deposits and notes.

Statutory Liquidity Ratio (SLR) – is the amount of liquid assets, such as cash, precious metals or
other short-term securities, that a financial institution must maintain in its reserves.

Prime Lending Rate (PLR) - is a term applied in many countries to a reference interest rate used by
banks.

Follow up
SEBI – IRDA Tussle
The Securities and Insurance Laws
(Amendment) and Validation Bill
2010 was passed by Rajya Sabha on
10th August, 2010 and is all set to
become an act. It is waiting
President’s Assent
IRDA not to rework ULIP norms
despite industry concerns said J Hari
Narayan, Chairman IRDA on the
sidelines of FICCI event on 10th
August, 2010.
(Economic Times, 11th August,
2010)

SEBI Takeover Code

The Following are considered the drawbacks of the newly proposed SEBI takeover code.

 Increase in tender offer triggers from 15 % to 25% Further Reading

will lead to fragmented share holding patterns Contrast the old and the new
SEBI guidelines on Take
 Proposed increase in minimum tender offer from
20% of voting capital to 100% is contradictory to over’s
all market evidence where over 85 % of all offers What is Creeping
occur at 20% levels Acquisition?
 The imperfect application of the rationale of What are tender offer
creeping acquisition. triggers?
 Short – Circuiting of the delisting regulations
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TIME TO SAY TATA- bye, bye.

By Subhashree Sundaraman

'BE NICE TO PEOPLE ON YOUR WAY UP, FOR YOU NEVER KNOW, WHOM YOU WILL
MEET, ON YOUR WAY DOWN', an apt line to refer to the man who has carried forward the
legacy of the Tata group with an immaculate thoughts- Ratan Tata.

Five generations gone and still the most humble business king carries a smile although he is tired.
Now is the time for the jaguar to rest and the highly coveted place of who is going to be his
successor has been debated in length and breadth for the past few days. The History of Tata is
something which we all have heard and must have read.

It all started with Jamshedji Tata who worked for his father for few years after which he started his
own cotton mill. After which he devoted himself to convert his dreams in to a vision in four key
areas, they being setting up an iron and steel company, a world-class learning institution, a one-of-
a-kind hotel and a hydro-electric plant. However only one of his ideas became a reality during his
lifetime and that is the one-of-a-kind hotel, The Taj Hotel which was inaugurated on the 3rd of
December 1903.

Then, began the journey of his successors, who ensured that each of his ideas was eventually
established. Today we have come a long way witnessing the growth of the 140 years old Tata
family. Mr. Tata, 72, head of the $70-billion salt-to-software group, who has built the world’s
cheapest car and taken the group global, will step down in December 2012 to pass on his crown to
the successors. For this there has been a five member panel that has been set up to decide on who
would be the next one for what is widely regarded as the top job in corporate India. The TATA’s
have asserted that the successor would be chosen based on his ability to grapple with the
complexities of globalised environment, preferably an Indian national, however an expatriate
chances to hold the post is also kept open. Speculations that chances of Indra Nooyi, the current
CEO of Pepsi and Arun Sarin, the Former boss of the Vodafone PLC to lead the next era of the
TATA group has also been considered. The TATA group observers feel that Ratan Tata’s half
brother Noel Tata would be a strong contender for the post and that the legacy would be carried
forward by him. Seeing the brilliant continuity of the family business, one would not want an
outsider to dwell into it as an expatriate is always required only during the time of a radical change.
Nevertheless, after the recent spate of global acquisitions, the chances of the expatriates getting the
top job at group companies has left the mass to bear the anxiety for the next few years till the right
person comes to lead the group.
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Disaster in high seas

By Niranjana Menon

This week a special emphasis has been laid on the environmental law, the pollution of environment
and the allied involvement of corporate. Disaster in high seas looks into the oil spill that resulted
from explosion on Deepwater Horizon Rig (BP Oil Spill) in the Gulf of Mexico and how the
American government responded.

Background Environmental Perspective & Human Cost

The Deepwater Horizon oil spill is an About 1 in 17 jobs in the region are
oil spill in the Gulf of Mexico. It is the directly in the fishing industry and
largest marine oil spill seen ever since will be affected severely. With
the Exxon Valdez in 1989.Though it’s regard to environment over eight US
not been determined exactly the cause,
National Parks are threatened and
it was essentially because of improper
more than 400 species that live in
casing to the walls of oil wells. The
Gulf islands and marshlands are at
Deepwater Horizon Drilling rig
explosion took place on April 20, risk.
2010. After burning for approximately
36 hours, the Deepwater Horizon sank
on the morning of April 22, 2010.
Legal Aspect

Laws in question Over 130 lawsuits relating to the

Oil Spill Protection Act of 1990
General maritime law
International Convention-OPRC
spill had been filed against one or
more of BP, Transocean, Cameron
International Corporation, and
Halliburton Energy Services.
Aftermath

 BP accepted full
responsibility.

 BP has set up a $ 20 Billion

Contrast
spill response fund.
Let us now compare possibly the
 CEO of BP Tony Hayward
two greatest environmental
Quit.
accidents due to negligence on part
of big corporations , firstly the
American Government in BP Oil
Spill has been able to not only
secure a USD 20 Billion response
fund but also head of its CEO Tony
Hayward. But in case of Bhopal Gas
tragedy (Contd)...

Continued from above
the Indian Government took over 26
years to convict and hold the people
involved liable for negligence. It
also extended a paltry Rs. 1265
Crore aid package as compared to $
20 billion in BP Oil Spill. And it
also allowed Union Carbide CEO at
that time Warren Anderson to go
scot free.
Conceptualised and Edited by –
Team Information Panel of
Corporate Law Cell.
For further queries and
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at ilsccell.ip@gmail.com
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Questions to be raised
 Why is there an inherent
uncomfortable – ness on part
of the Indian Government in
implicating large corporate
houses for their crimes?
 What are the parameters in
India as opposed to America
in judging cost of
Environmental disasters?
 What is the Jurisprudence
behind making corporate
liable for their actions with
regard to such Environmental
mess
 What are the laws that govern
such scenarios in India?