EquiCorp Associates

In Sahara Desert- Distress Hours Once upon a time, Sahara’s Subrarta Roy- a friend to all who came calling-whether a matinee idol in his 80s or a sports star in her teens, self bestowed title- “ Sahara Shri ”- t he sponsor of the Indian cricket team and a group headed by a colourful, flamboyant CEO hobnobbing with Bollywood stars and cowbelt politicians could boast of having friends in high places. Today in this distress hours, there seems to be few people who he can turn to in his hour of distress. For the sleepy Lucknow of the 1990s whose favourite past-time seemed to be reminiscing the city’s long gone glory days, Subrata Roy Sahara brought a cash of heavy bling and some more. Sahara has stayed afloat for more than 35 years despite repeated regulatory onslaughts. The first setback was in the late '90s when RBI slashed the discretionary investment powers of its finance firm. The next blow came in 2006 when its depository services firm had to be shut down. The big jolt came...

The Reserve Bank of India (RBI)   vide a notification  on 7 February 2014 has made modification to the non-banking finance companies (NBFCs)- micro finance institutions (MFIs) directions with regard to pricing of credit whereby the earlier   interest rate   cap (As per the Malegam Committee recommendations, the   interest rate   cap on loans given by MFIs has been fixed at 26%) imposed on NBFC-MFIs was reviewed and modified.   The  notification  reviews and modifies the interest rates to be charged by NBFC-MFIs to its borrowers and will be calculated to be lower of the following: a.      The cost of funds plus margin; or b.      The average base rate of the five  largest commercial banks  by assets multiplied by 2.75 Further, RBI shall at the end of each quarter advice on the average of the  base rates  of the five   largest commercial banks   and shall determin...

Registration TV Channel in India involves various registrations and approvals which includes, the approval/register itself with Ministry of Information & Broadcasting (“ MIB ”) and/or Telecom Regulatory Authority of India (“ TRAI ”) and/or (Wireless Planning & Coordination Authority) Wing of the Ministry of Communication and Information Technology (“ WPC ”) as the case may be. Though the Indian Telegraph Act, 1885 (“ Telegraph Act ”) does not explicitly define ‘telecommunications service’ and ‘broadcasting service’, the TRAI Act, 1997, defines communication service in Section 2(1)(k) as: “Service of any description (including electronic mail, voice mail, data services, audio-text services, video-text services, radio paging, and cellular mobile telephones services) which is made available to users by means of a transmission or reception of signals, writing, images, and sounds or intelligence of any nature, by wire, radio, visual or any other electronic means but shall no...

For the last few years, Securities and Exchange Board of India (“ SEBI ”), the Indian securities regulator, has intensified its scrutiny of investment structures that raise domestic capital on an unregulated basis. It shall be noted that the Collective Investment Scheme (“ CIS ”) activities hereunder covers various relevant legislations, regulations and rules, for the time being in force in India and the legal entity has to obtain approval/register itself with SEBI as a Collective Investment Management Committee (“ CIMC ”) to be able to launch a CIS. In last few years, SEBI has intensified its scrutiny of investment structures that raise domestic capital on an unregulated basis wherein various entities garner funds through fraudulent investment schemes with promise of huge returns mainly in the name of property development and agriculture.  Securities Appellate Tribunal (hereinafter the “ SAT ”) recently passed an order upholding SEBI’s findings against Alchemist Infra Realit...

The question whether a MoU is binding or non-binding is a question of general contract law. As is the case in a contract a MoU will be binding if there is a valid offer and acceptance, consideration and intention to be bound by the agreement. The most important pre-condition for a MoU to be legally binding is that it should be certain. The courts do not expect commercial documents to be drafted with strict precision. However, for an MOU to have legal effect, the essential terms must be sufficiently clear and certain. Arguments in favour of enforceability of a MoU When the terms of a MoU are clear and conclusive and a contrary intention not to be bound by its terms does not exist a MoU should be given effect to as a normal contract. Merely because a MoU is a preliminary agreement by which the terms agreed upon are to be put in a more formal shape does not prevent a binding contract. ( See, Kollipara Sriramulu (dead) by L.R. v T. Aswatha Narayana (dead) ...

A Non-Banking Financial Company (NBFC) is a  company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares stock/bonds/debentures/securities issued by Government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, sale/purchase/construction of immovable property. A non-banking institution which is a company and which has its principal business of receiving deposits under any scheme or arrangement or any other manner, or lending in any manner is also a non-banking financial company (Residuary non-banking company). Advantages of NBFC a)       it can provide loans and credit facilities, b)       it can trade in  money market instruments c)       it...