Saturday, November 14, 2009

Bits of Interest

1. Siddharth Shah, et. al., offer suggestions for amendment of the SEBI Takeover Code in light of its review by the Takeover Regulations Advisory Committee (TRAC);

2. Shantanu Surpure and Rashi Saraf compare and contrast the regulations in the US and India regarding insider trading, and point to the difficulties in successful investigation and prosecution of violations;

3. Sandeep Parekh critiques SEBI’s approach in the IPO scam cases;

4. T.T. Ram Mohan views Government disinvestment in public sector undertakings from a governance perspective;

5. The Reserve Bank of India (RBI) announces draft guidelines with a view to liberalising the regime governing derivatives in foreign currency by permitting certain types of put and call options, while prohibiting others;

6. The Economist analyzes the acquittal of two Bear Stearns hedge fund managers who were prosecuted for lying to investors about the state of their funds. They are said to have exchanged e-mails that “showed the two panicking behind the scenes while reassuring investors in public.” The collapse of the two Bear Stearns hedge funds in 2007 exhibited the first signals of the financial crisis. This case has some similarities with that of a stock analyst at Merrill Lynch during the Internet bubble years, but the latter case resulted in a different outcome;

7. Noted economist Dani Rodrik disfavours the removal of capital controls. He notes: “Prudential control on capital flows makes a lot of sense. Short-term flows not only wreak havoc with domestic macro-economic management, but also aggravate adversary exchange-rate movements”. He adds: “You can oppose capital controls because you believe financial markets are on the whole a force for good, and that any interference will therefore generate efficiency losses. Or you can oppose controls because you think that they can be easily evaded and are therefore doomed to remain ineffective. What you can’t do is oppose capital controls because they are both costly and ineffective.” All of this is surely music to RBI’s ears.

8. Finally, the Harvard Law School Forum has some lessons for M&A advisors in drafting their engagement letter to protect themselves from third-party liability, at least as a matter of New York Law.

1 comment:

vswaminathan said...

RE. BoI 3., extracts from my 2feedbacks to Business Line below:
1. Friday, 13 November, 2009
IPO scam: SEBI panel blames it on NSDL’s laxity (12th Issue)

S(ss)o, that is one more in the series of the costly game of passing the buck played at the expense of the 'least aroused' public.

Is that not by itself a rational ground for the SEBI to, by way of extending its chivalrous gesture, for the same reason of 'transparency', make all the related papers - not only 'their orders of Decembar 2008' as earlier reported, public; of course, for what ever be the purpose it could be expected to ideally serve ?

2. Subject: SEBI board annuls committee orders on NSDL in IPO scam
Date: Tuesday, 10 November, 2009, 3:02 AM

"In April the board (with Mr Gopal dissenting) decided that three non-whole time members would decide on the appointment of a legal counsel to examine if the committee had acted within the framework and terms of reference.
In August the board considered the legal opinion and decided that the findings of the committee against the board (namely, that it had failed as a regulator while disposing of two matters relating to the IPO scam and DSQ Software ) were outside the confines of delegation and “without authority of law”."

COMMENTS:

This report gives rise to more than one grave but discomfiting point of doubt:
1. What do "the framework and terms of reference" truly connote?
And were they so inflexible and rigid as to permit no scope at all for any other relevant aspects that would require to have been gone into so as to fully and justifiably meet the real objective of the reference?
2. “without authority of law”- Of which law?
In all fairness to the discerning interested section of the people, the full information on the foregoing aspects also should be made public.

vswaminathan