IPL franchise

Transactions involving IPL Franchises: Legal Due Diligence

With the recent auction and sale of media rights of the Indian Premier League (“IPL”) by the Board of Control for Cricket in India (“BCCI”) for over INR 480 billion (approximately USD  6 billion), IPL franchises are in the spotlight. Reports suggest that certain IPL franchise owners may look to capitalize on an improved valuation, and either sell a part (or all) of their shareholding in the legal entity that has bid for and owns the IPL franchise, or may even consider a public listing of such legal entity.  In this note, we look at key legal due diligence issues that may arise in connection with transactions involving IPL franchises.


SEBI circular

Changes to Quarterly Shareholding Disclosures by Listed Entities in India

On June 30, 2022, the Securities and Exchange Board of India (“SEBI”) issued a circular amending the quarterly shareholding pattern disclosed by listed entities in India (the “2022 Circular”). This amended an earlier SEBI circular dated November 30, 2015. The 2022 Circular comes into force with effect from the quarter ending September 30, 2022. Listed entities are required to submit their shareholding pattern to the stock exchanges within 21 days of the end of each quarter in formats prescribed under the circulars. This note discusses certain key changes implemented by the 2022 Circular.


independent directors

Monitoring Independent Directors: Who Will Guard the Guards?

Since the introduction of the concept of independent directors, it has been perceived as an easy remedy to poor corporate governance. Their efficacy in effectively monitoring company management is often taken at face value. Studying recent instances of corporate governance lapses provides an insight into the efficacy of independent directors. To plug gaps, regulators constantly strive to raise the bar on the relevant criteria for determining the independence, and the procedure for the appointment, of independent directors. However, the changes affected do not appear to address the problem at hand. In the United States, unlike in India, shareholders have often pursued derivative claims against independent directors. While these derivative actions are not always successful, they function as an additional check on independent directors’ actions. Derivative actions are also pursued by shareholders in India. However, they: (a) are rarely pursued against independent directors; and (b) typically arise out of situations where directors have committed a fraud on the shareholders rather than when they have simply failed to perform their duties. For independent directors in India to function as an effective check on management, the threat of shareholder action needs to be a real one.


ESG in India

Indian Legal Regime for ESG

The need for addressing Environmental, Social and Governance (“ESG”) related aspects, has never had more prominence than now. There is growing recognition of the financial and economic impacts of ESG risks across the globe and the investors are increasingly relying on ESG as an important metric to guide their investment decisions. Internationally, regulators and enforcement agencies are taking greater cognizance of ESG related issues and a more stringent view of non-compliances or greenwashing by any business regarding their ESG credentials. The impact of climate change, requirement of good governance and protection of interest of various stakeholders are increasingly forming part of various formal and informal dialogues, particularly in the post COVID era. At the 2021 United Nations Climate Change Conference (“COP-26”) held in Glasgow, United Kingdom, India, along with 196 other countries made enhanced commitments towards mitigating the risks associated with climate change. The recent legal developments have demonstrated that the regulatory landscape for ESG in India has developed at a measured but regular pace and the Indian regulatory authorities are now catching up on the ESG trends that have been ongoing at a global level. With so much being said and done in relation to ESG on a day-to-day basis, it is sometimes difficult to focus on the real issue. This note aims to explain the concept of ESG and provides a brief overview of the Indian regulatory landscape in relation to ESG.


digital markets

Digital Markets Must be Defined Well for Competition Regulation

The rise of the digital sector has presented unique challenges for Indian regulatory authorities, including the Competition Commission of India (“CCI”), thanks to significant differences in the way such markets operate compared to traditional markets. There is growing demand, worldwide and in India, to hold digital platforms responsible and accountable for adverse impacts caused by them. A preliminary step involved in such probes is that of defining a ‘relevant market’ within which such digital platforms operate. This note analyzes the CCI’s approach on defining a ‘relevant market’ in the digital sector so far, and the need of the hour in terms of considering all substitutable and interchangeable products or services while defining such markets.


shareholder activism in india

Shareholder Activism in India: The Zee-Invesco Decision

India has witnessed a significant increase in institutional shareholder activism over the past few years. As a consequence of the rapid rise in shareholder activism, there has been much greater focus on the rights of minority shareholders in relation to a company. In this context, the judgment of the division bench of the Bombay High Court on March 22, 2022 in Invesco Developing Markets Fund v. Zee Entertainment Enterprises Limited addresses two key issues: (i) the statutory right of shareholders to call a shareholders’ meeting and (ii) the appropriate judicial forum for such shareholder disputes.


insider trading regulations

Testing the Frontiers of the Insider Trading Regulations

By an order issued on January 14, 2022, the United States District Court, Northern District of California allowed the Securities Exchange Commission (“SEC”) to proceed on the misappropriation theory of insider trading in its “shadow trading” complaint against Matthew Panuwat. The SEC had alleged that Panuwat used confidential information about the acquisition of his employer, Medivation, to buy options in another publicly traded company and Medivation’s peer, Incyte. This note discusses the circumstances in which trading in securities of a company while in possession of information related to another company may be considered a violation of the Indian Insider Trading Regulations.


pvr inox

The PVR-INOX Merger: Bouncing Back from the Pandemic

On March 27, 2022, PVR Limited announced that it proposes to merge with INOX Leisure Limited. The combined entity will be rebranded as ‘PVR INOX’ and will have a network of 1,546 theatres. Ordinarily, a deal of such magnitude would have required prior approval from the Competition Commission of India, however the decreased revenue of the parties owing to the pandemic appears to have provided a unique benefit to this deal. This note analyzes the market positions of PVR and INOX, the role of the CCI, and the target based exemption that is applicable to this deal.


Private Equity in Sports Franchises in India

With the recent expansion of the IPL to include two new teams, CVC Capital Partners, a leading international private equity firm, acquired the Ahmedabad franchise – this is the first instance of a significant private equity investment in professional sports in India. We discuss the opportunities and potential challenges that lie ahead for private equity investment in sports franchises in the attached note.