CASE STUDY

The Division Bench of the Bombay High Court, in the case of Invesco Developing
Funds Limited v. ZEE Entertainment Enterprises Limited, ruled in favor of Invesco,
ZEE’s shareholder with regard to calling an EGM as per the statutory guidelines
under the Companies Act, 2013. The Court ruled that the Act doesn’t stipulate the
interpretation of a ‘valid requisition’ rather Section 100 is only restricted to
numerical and procedural compliances. The judgment gives due acknowledgment to
the legislative intent behind the Companies Act and seeks to protect shareholder
rights by asking for an EGM. The Court further held that the resolutions proposed by
the shareholders, even if, can’t be implemented, the latter cannot be prohibited from
exercising their legitimate rights. In this regard, the Court diverted itself from the
ruling of the Single Bench and distinguished between Section 100 of the Companies
Act, 2013 and Section 303(5) of the English Companies Act, 2006. Pertinently, the
Bench also held that granting an injunction against Invesco goes against Section 430
of the Act and specifically bars the jurisdiction of civil courts in company law
disputes. The most important significance of this judgment is that it restored
shareholders’ rights and affirmed corporate democracy which will provide a boost to
shareholders’ activism.

CIRCULAR/NOTIFICATION

Vide Notification 2 of 2022 dated April 8, 2022, the CCI by invoking its power under
Sections 36, 57, and 64 of the Competition Act, 2002, has amended the Competition
Commission of India (General) Regulations, 2009. By this amendment, the
Commission seeks to maintain confidentiality regarding the identity of the
informant, provided that the informant asks for the same in writing. The commission
shall be establishing confidentiality ring(s) which will comprise authorized
representatives of parties who shall be able to access the information in unredacted
form. It also provides that in case of any breach of confidentiality by the
representatives included under the confidentiality ring, the prosecution shall be
initiated as per the provisions of the Competition Act. The notification, further
provides that only, in special circumstances where the Commission deems fit that
inclusion of the informant in the ring is necessary, the Commission may include the
informant in the confidentiality ring.
DEAL

On April 4, 2022, HDFC Limited announced that it will merge with the HDFC Bank.
The merged entity will be the HDFC Bank, and therefore, any significant change for
bank consumers is unlikely to happen. While this proposed merger is yet to be
approved by the RBI, it holds significant importance as it will be one of the biggest
mergers in the Indian M&A industry. Upon successful completion of this merger, the
subsidiary or associates of HDFC Limited will also be transferred to HDFC Bank and
will be facilitated through a share swap mechanism. Post-merger, HDFC Limited will
exhaust all the shareholding in HDFC Bank and the former’s shareholders will own
41% of the latter. This merger will improve the ability to cross-sell products to a
larger customer base, the move will help them leverage their distribution across
urban, semi-urban, and rural geographies.