Article

Independent Directors and mandate of online proficiency test: Approbation or mere disdain?

By Sudish Sharma and Vidhi Madan

The article in this 100th issue of L&S Corporate Amicus discusses at length the consequential effect of the implementation of Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019. As per the Rules, an online databank of persons eligible to be appointed as Independent Directors (ID) will be placed on the website of Indian Institute of Corporate Affairs and any ID whether already appointed or is proposed to be appointed must undergo the process of passing online proficiency test for inclusion of his or her name into database of IDs. According to the authors, this method may help in bringing professionalism, alertness and more accountability leaving aside a usual passive role. However, there are apprehensions about the mechanism of such a test. The authors point out certain ambiguities like what if such a standardized test leads to shrinking of the pool of independent directors specially discouraging those who were appointed for specialized knowledge in their respective fields. The authors believe the office of IDs also needs a holistic relook so that a bulk of these IDs does not quietly leave the scene being underpaid, underpowered, under-respected and over-obligated...

Notifications and Circulars

• SARFAESI – Amendments by Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016 effective from 4-1-2020
• Exemption from declaration of exports - Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2019
• SEBI (Issue of Capital and Disclosure Requirements) (Fifth Amendment) Regulations, 2019
• Acquisition of financial assets by Asset Reconstruction Companies from sponsors and lenders – Restrictions
• Investment norms for mutual funds for investment in debt and money market Instruments
• NBFC Peer to Peer Lending Platform (Reserve Bank) Directions, 2017, updated
• Format on statement of deviation or variation for proceeds of public issue, rights issue, preferential issue, qualified institutions placement, etc.
• Framework for listing of Commercial Paper – Amendments
• Stewardship Code for mutual funds and all categories of alternative investment funds

Ratio decidendi

• Conversion of public company into private company – Section 14 required to be followed – Endless saga of the Cyrus Mistry Feud – NCLAT
• Time consumed in SARFAESI proceedings to be excluded for calculating limitation under IBC – NCLAT

News Nuggets

• Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019 promulgated
• Chit Funds (Amendment) Act, 2019 effective from 1st of January, 2020
• Section 142(2) of Negotiable Instruments Act, 1881 is constitutionally valid
• Place of arbitration is juridical seat of arbitration unless there is an indication to contrary
• Jammu & Kashmir – Special Court for speedy trail of offences under Companies Act, 2013
• Form BEN-2 and Form BEN-1 - Relaxation of additional fee and extension of last date
• CRX-4 for FY 2018-19 - Relaxation of additional fee and extension of last date
• LLP must register as Company under Companies Act, 2013 prior to its merger with another Company
• NCLT Order not as per Rule 151 of NCLT Rules - Bombay High Court quashes IBC admission order
• High Court when has jurisdiction over NCLT
• Arbitration - Challenge on inadequacy of reasons of arbitration award, must be adjudicated based on degree of particularity of reasoning required
• TRAI issues pre-consultation paper on ‘Enabling unbundling of different layers through differential licensing’