1st Edition
Cross Border Mergers and Acquisitions A Comparative Study between India and the USA
This book presents a comparative analysis of cross-border mergers and acquisitions (CBMA) in terms of competitive framework and procedures between India and the United States of America.
It discusses themes like statutes, regulations, rulings, legislations and analysis of CBMA; competition law, antitrust, and demerger; new legal initiatives by India like New Economic Policy (NEP), Goods and Services Tax (GST), demonetisation and amendments in the Foreign Exchange Management Act (FEMA); and the impact of COVID on CBMA, to showcase the challenges and opportunities of specific CBMA experience in India in a global framework.
This book will be an essential read for scholars and researchers of law, corporate law, company law, international company law, corporate governance, international relations, public policy, international trade law, economics, and for practitioners, policymakers and consultants working on the subject.
Foreword
1 Meaning of Mergers and Acquisitions
The Matrix of the Global Economy
Types of Mergers and Acquisitions
Meaning of Cross-Border Mergers and Acquisitions (CBMA)
History of the CBMA in India
The CBMA and RBI
Mandatory Prior Approval
Central Government Responsibility of Framing of Rules in Consultation with the RBI
Approval by the National Company Law Tribunal (NCLT)
Permitted Jurisdiction for an Outbound Merger
Penalty
Types of CBMAs
The Magnitude of CBMAs
The CBMA and Competition Law in India
The CBMA and Indian Tax Reforms
The CBMA and Financial Sector
CBMA and the Legal Provisions in India
Rules and Regulations
The CBMA and Indian Experience in Implementation
Indian Experience
The FDA and Emerging Markets
The Case of India
Economic Policy Reforms and the CBMA
Major Legal Reforms of the CBMA in India
Demonetisation and the CBMA
Impact of Demonetisation
The CBMA and Growth in Business
The CBMA and Jan Dhan Accounts
People’s Inclusiveness and Economic Reforms
Finance Banking Governance Reforms
IT Act and the CBMA
The CBMA and FEMA
Issuance of Shares in the CBMA
The Framework to the IBC Process—Opportunities
Start-ups and the CBMA
Kaizen and the CBMA
The CBMA and Domestic Experience of Learning Importance
The CBMA and Prevention of Corruption Act, 1988 and Foreign Direct Investment Rules
The CBMA and SEBI
SEBI and the CBMA
Motives for the CBMA
CBMA: Culture and Corporate Governance
The CBMA and Emerging Countries
The CBMA and Specific Types of Mergers
CBMA and the Competition Law, 2002
CBMA and the Stamp Duty Act
CBMA and the Judicial Infrastructure
CBMA and the USA
Securities and Exchange Commission
FTC (The Federal Trade Commission)
The CBMA and USA Tax Reforms
The CBMA and Tax Reforms in the USA, CFC, TIPRA
Controlled Foreign Corporation (CFC)
FIRPTA, 1980 and THA-2015
Internal Revenue Service (IRS)
CBMA and Legal Due Diligence
The Doctrine of Successor Liability and Department of Justice, USA
CBMA and Legal Due Diligence in Antitrust/Competition Matters
The Sarbanes–Oxley Act, 2002
The Dodd-Frank Act
National Security in USA and CBMAs
CIFUS and the CBMA
Clayton and the HSR Acts and Amendments
Specific Examples
Comparison between the USA and India
International Law
CBMA and BRICS (Brazil, Russia, India, China and South Africa)
CBMA and International Trade
Indices and Ratios
CBMA Emerging Economies, India and BRICS
CBMA in Emerging Economies and Developed Economies
LDC and EM in the CBMA Environment
Emerging Opportunities and CBMA
Comparative CBMA in Various States of the USA
Upheavals in Global Economy
CBMA and Cyber Business
Conclusion
2 Cross-Border Mergers and Acquisitions: Statutes, Regulations, Rulings, Legislations and Analysis
Introduction
Culture and the CBMA
CBMAs
CBMAs: Ease of Doing Business
Ease of Doing Business Index (EDBI)
Solvency and Ongoing Concern
IBC (The Insolvency and Bankruptcy Code)
Cross-Border Insolvency; India and the USA
Pre-Packs
The Pre-Pack in the USA
CBMAs and GST
CBMAs and Real Estate Regulation Act (RERA)
Impact of RERA on the Functioning of Real Estate Developers and Other Stakeholders
CBMAs, RERA Priorities Present, and Future
Amendments to PC Act, 1988 and FDI Rules
The CBMA and Insider Trading
The CBMA and Hostile Takeover
The CBMA and Warranties
The CBMA and Industrial Dispute Act and Essential Acts
The CBMA, Specific Relief Act, and Corruption
Corruption and IBC 2016
The CBMA and FDI
Gaps in the CBMA Domestic and International Learning Experience
Purchase and Sales and CBMAs
CBMAs and Influencing Factors
Enabling Factors of the CBMA
Foreign Investors
Motives for the CBMA
The Benefits of the CBMA
Challenges and the CBMA
Synergy—CBMA
Corporate Governance
The CBMA Culture Governance and Corporate Governance
Employee Attrition and the CBMA
Comparative Factors, International versus Emerging Countries, and the CBMA
Implementation in Developed Countries—CBMA
Emerging Markets and the CBMA
Example of the CBMA in Intra-emerging Developing Countries
The CBMA and Specific Types of Mergers
Fraud and the CBMA
Insider Trading
Provision of Section 195 of Companies Act, 2013
Competition Law and the CBMA
Provisions and Implementation of the Stamp Duty Act (1899)
Judicial Review
Innovation and the CBMA
Integration and the CBMA
Technology and the CBMA
Research and the CBMA
The Effect of Synergy
Culture and CBMAs
The CBMA and Corruption
Lawyers and the CBMA
Reasons for Failure of the CBMA
3 CBMA, Competition Law, Antitrust and Demerger
Introduction
Competition, Antitrust and the CBMA
The CBMA and Antitrust Laws
The CBMA and US Antitrust Experience
Case Study
Antitrust Matters and Global Enforcement Guidelines
Antitrust Litigation in the United States
Frivolous, Bad Faith and Sham Commercial Litigation and CBMA
Competition Policy and CBMA in India
Competition Commission of India, Recent Developments
Coordination among Various Regulators
Competition Act, Competition Commission, Mergers, Amalgamation Enforcement, Suggestions
Recent Experience in CBMA and Ease of Doing Business Index
Gaps, Tribunals, Scope for Correction
The Concept of Demergers in India and the USA
Legislative Initiatives in India and Jurisdiction of Ministry of Corporate Affairs
Ministry for Corporate Affairs, Government of India
Inbound Mergers
Out Bound Mergers
Companies Compromises and Agreement or Amalgamation Rules, 2016 Bilateral Agreements and CBMA
Nokia’s Case
Stamp Duty and CBMA
Stamp Duty Act and Its Implications on CBMA
Stamp Duty Law in India-Legislative Provisions
Maharashtra Stamp Act, 1958
Karnataka Stamp Act
Controversy
Li Taka Pharmaceuticals vs State of Maharashtra (1997)
Hindustan Lever vs State of Maharashtra (2004)
Delhi Towers Ltd vs GNCT of Delhi (2009)
Delhi Towers Ltd vs GNCT of Delhi (2009)
Specific Relief Act, 1963: The Amendment Bill, 2017 Implications on Business Transactions and CBMA
Specific Relief Act, 1963
The Implications of the Amendments to the Specific Relief Act, 1963 (SRA, 1963)
The Proposed Changes
General Rule, Specific Performance and Changes
Discretion Given to Courts and Committees
Rights of Third Parties
Separate Class for Public Contracts
Implications
Effects of the Specific Relief (Amendment) Bill, 2017 on the Law of Remedies for Breach of Contract
Limited Liability Act, 2008 and Its Implications on CBMA
LLP Act in India
Benefits
CBMA and CAG
Corruption Transparency Issues in Cross-Border Mergers and Acquisitions, the USA and India
Corruption
FCPA in the USA
Example of Major Cases
Enforcement in the USA
Control Framework and Structures
Compliance Programmes
Scope of Improvement
Vicarious Liability/Responsibility and CBMA
Anti-corruption due Diligence and Critical Examples
Effectiveness of FCPA Implementation
Critical Examples of Anti-corruption Prosecution in CBMA
Transparency and Evaluation of Indian CBMAs
Conclusion
4 New Legal Initiatives by India in CBMA Environment
Introduction
Money Laundering and CBMA
SFIO and the CBMA
The Importance of Credit in the CBMA
SARFAESI and the CBMA
The CBMA and Banking Reforms
The CBMA and Banking Sector Reforms
RBI Reforms and the CBMA
Tax Havens and the CBMA
Banking Sector and the CBMA
Banking and New Initiatives
Stamp Act and the CBMA
Latest Developments
Improvement in Ease of Doing Business Index
Efforts for Modifications of Law
Conclusions
5 COVID and the CBMA
The Impact of COVID-19 Pandemic Crisis on Mergers and Acquisitions
COVID-19 Pandemic and the CBMA Trends
Logistics, Transportation, Supply Chain Management and COVID-19 Pandemic
Government Regulators
Scope for Increases in FDI and FPI through CBMA during COVID- 19 Pandemic
Travel and Tourism
Regulator Dilemma
COVID-19 Pandemic and the Changes in the Structure of Business in the Context of the CBMA
Investment Funds and SEBI
Letters of Intent
Non-Uniform Impact of the COVID-19 Pandemic
The MAE/MAC Impact on the CBMA vs. COVID-19 Pandemic
The Strategic Outlook of the Global Economy Due to the COVID-19
Pandemic
Resilience and COVID-19 Pandemic
Flattening of the Pandemic Graph
Lockdown and COVID-19 Pandemic
Impact of COVID-19 Pandemic on International Business Law
Accountancy Issues
Accounting-Related Issues
Long-term Stability vs. Short-term Crisis
The Response of Major Centres and Industrial Sectors
Prevention is Better than Perishing
Anticipation Is Better than Precipitation
International Rules on the CBMA Restructuring
RCEP and the CBMA
COVID-19 Pandemic, the CBMA and Corporate Fraud
Risks and Threats to the CBMA
Mergers and Acquisitions and Distressed Assets
Protective Measures and Impact of COVID-19 Pandemic
Law Business Strategy, the CBMA and COVID-19 Pandemic Impact
Economy and Cross-Border Mergers and Acquisitions
Litigation and Cross-Border Mergers and Acquisitions
Due Diligence and Emerging Technology
Legal Implications and Labour Law
Impact, Short- and Long-Term of COVID-19 Pandemic on the CBMA
Legal Implications of Failed Negotiations on Price Front
Revenue and Solvency Issues
Date-line Compliance
Legal Position of Merger Law and the Changes in the USA
Regulatory Law in the USA
Pandemic COVID-19 and Lessons
Attempts to Amend the Merger Law in the USA
Work from Home and Quarantine Care and COVID-19 Pandemic
Global Economic Distress and COVID-19 Pandemic
Business during COVID Era
Innovations in Administration
COVID-19 Pandemic and Govt. of India’s Response
Opportunistic and Predatory Takeovers
Effects of Timelines and Antitrust Review Mechanism by the State
T-Mobile Sprint Case
Introduction
The Verdict of DOC, the USA
Conclusions of Law
FTC and COVID-19 Pandemic
Employee Attrition and Precautions in the CBMA Environment due to COVID-19 Pandemic
Post-COVID-19 Pandemic Strategies in the CBMA
Proper Due Diligence
Evaluation of Business Worth in the Post-COVID-19 Pandemic
Post-COVID-19 Pandemic Regulatory Aspects by Government and Autonomous Agencies
Compliance to Legal Provisions and Documentation
IBC, CBMA, COVID-19 Pandemic, India and the USA
Insolvency and Bankruptcy Code and Its Effectiveness
Resolving Insolvency
Banks, Non-Performing Assets, Insolvency and Bankruptcy Code
NPA and IBC
Non-Performing Assets
IBC vs Insolvency Proceedings in the USA
Timelines and IBC
The Similarity between IBC and USBC
International Opinion about IBC
Effect of IBC in India
Banker’s View on IBC
The US Bankruptcy Code, 1978
Comparison of Bankruptcy Regulations between India and the USA
Post-Bankruptcy and Reconstruction
Composition of Creditors Committee and the Law
Historical Evolution of Bankruptcy Law in the USA and India in the Context of the CBMA
Impact of Current Pandemic Wave-II in India
6 Pandemics, Business Response, Law and the CBMA
Supply Chain Logistics and COVID-19 Pandemic
Insurance and COVID-19 Pandemic
Case Study of Start-up and Acquisition during COVID-19 Pandemic Era in India
Case Study Example of the Law Enforcement in India as the Cause of Ease of Doing Business in India
New Technology Banking Reforms and COVID-19 Pandemic
Industrial Labour Reforms and Ease of Doing Business Index
Legal Innovation
Online Dispute Resolution and Ease of Doing Business
Digitalisation and Cross-Border Mergers and Acquisitions
Fraud Prevention
Whistle blower Protection and Rule of Law as a Tool for Ease of Doing Business in CBMA Environment
Ultimate Suggestions
COVID-19 Pandemic and Cybersecurity and the CBMA
Cybersecurity, CBMA, and DSCI
National Company Law Tribunal
COVID-19 Pandemic and Resolution for Liquidation
NCLT, COVID-19 and New Electronic Initiatives
7 Fairness in Acts and Activity
Competition Commission of India
IBBI Initiatives and Accountability
The Federal Trade Commission of the USA and Its Performance Snapshot for the Year 2019
Security Exchanges Commission and Mergers Acquisitions Joint Venture Guidelines, an Update in the USA
FDI and Its Links with Foreign Trade Growth in India
Banking Sector Reforms and the CBMA
Start-Ups and New Technologies
Suggestions
The Non-Last Word
8 Recent Reforms in Law in India
CBMA and UNICORNS
One-Person Company Framework (OPC)
MCA
21 Version 3.0
NCLT Framework Strengthening
Foreign Direct Investment in Insurance Companies
Securities Market Code
Exemption of Stamp Duty in Government Sale Transactions
Mergers—Acquisitions Vis-à-vis Budget 2021–2022
Latest Developments (till June 24, 2021)
Prevention of Scams/Frauds in CBMAs
Role of NFRA (India), PCAOB (USA)
Comparative Infrastructure in the USA and Lessons to Be Learned
PCAOB
Cross-Border Mergers and Acquisitions and Jurisdiction
United States and the Doctrine Effect
9 Kaizen for Global Excellence
Recent Examples of Implementation of Legal Provisions in India
Post-COVID Pandemic Changes, Threats and Opportunities
IBBI Regulatory Framework Changed Mandate
Evaluation of Initiatives and Implications for Further Action
Suspending a Tiny Part of IBC
Lessons of the Pandemic—2nd Annum in the Year 2021
Role of AI (Artificial Intelligence) and ML (Machine Learning) in the Corporate Sector
Exposure of New Sectors to Competition and Predation
The Dangers of Living with Obsolescence
Disruptions, Hacking, Cyber Threats and Fraud
Cost of Repetition and the Question of Legitimacy and Intention of Enforcement
Kaizen in the Economy, Law and Integration of Technologies vs Increasing Redundancy of Differentials
Current Reforms in India
Non-Performing Assets and the Banking Law
IBC, IBBA and Specific Law for the Prevention of Insolvency
The Role of Enforcement
Lobbies, Pressure Groups, Publicity and Public Interest Litigation Policy
Indexes of Governance—Ease of Doing Business, Arbitration, Redressal of Disputes, ADRs
Regulatory Authorities and Enforcement
Credibility of the State through Performance of Government
Seamless Connectivity from Military, Medicine and Management (M3) for Diagnosis, Delivery and Diligence (D3)
Law as a Link from the Past, through Present for Future and Perspectives of Law
Law as a Fair Elixir of Tri Virtues—Equality, Freedom and Justice
Corporate Justice, Civil Justice, Criminal Justice and Governance
Global Trade, Export Import 2021 and International Trade in Goods and Services in India
Domestic Trade Policy
Financial Services
Suppliers of Financial Services Must Comply with the Requirements Set Out in the Relevant Legislation
Banking
Securities
Insurance
DIPP and FDI
Index
Biography
Boppudi Naga Ramesh belonged to the Indian Police Service (1988 batch), and worked in West Bengal cadre and in different parts of India, fighting anti-insurgency forces and left-wing extremist forces in the Kashmir Valley and in central Indian states. As a civil engineer, he worked for TATAS and earned an MBA degree from the Indian Institute of Management, Calcutta. A triple PhD, his first PhD was from the Indian Institute of Technology, Kharagpur; his second PhD was from the National Police Academy, Hyderabad; and the third PhD was from National Law University, Delhi, India. He is MA Psychology, LLB, LLM and Post-Doc Fellow from JNU, New Delhi. He retired as a DGP, in West Bengal, and presently is a Professor of Law and Management at Maharashtra National Law University, Aurangabad, where he pursues a postdoctoral fellowship in LLD. He won the President of India Police Medal for Meritorious Services and many other medals which include the distinguished alumni medal from IIT Kharagpur. He has participated in many marathons and is an international cyclist as a commando trainer.
….Large businesses can no longer afford to remain isolated. Transnational Expansion is in most cases, the key to survival. One of the methods is to enter foreign markets to ensure movement of capital and ghouls through transactional mergers and acquisitions.
Dr. Ramesh has covered the subject from all angles including the synergies emerging from such mergers and acquisitions. He has dealt with the subject from a broad prism of statutes of the USA, UK and the EU and has analysed them from the Indian perspective. He has dealt with all the vital areas including law, purpose and practical issues, relevant for and to be borne in mind, while venturing into CBMAs.
The book would be useful to lawyers, law students, industry professionals and chartered accountants alike. It should be fine guide to those who wish to acquire basic knowledge on the subject
- Justice Raja Shaker Mantha, Judge, High Court At Calcutta.Having Obtained a Doctorate of Philosophy (Ph. D) in law for his thesis on Cross Border Mergers and Acquisitions, the author has mastered the intricacies of the subject while making a Comparative Study of the Legal Framework and Procedure in India and the USA. Moreover, the author has put immense effort to simplify the subject so that even a layman can understand well the world of cross-border mergers and acquisitions.
In dealing with Impact on CBMA and prevention of fraud in CBMA, the author made a very detailed analysis and a laudable explanation which will surely give the reader more insights about the subject.
- Justice B. Krishna Mohan, Judge, High Court of Andhra Pradesh, Amaravati, Guntur.
Coming to the present research work, I can say this is one of the novel topics which has contemporary relevance though titled as legal framework but interdisciplinary approach a combination/blend of Management and Business Studies too. The theoretical presentation of the choppers is a lucid and very much information, interesting, the terminology of the International business is very well explained, and the linkage between the chapters is apt and convincing. The research design and the development is well articulated and addressed the gaps with the detailed justification by citing suitable research studies. The construction, flow and uses of English language appear at the free and hence appreciable.
- Justice Dr. Bulusu Siva Sankara Rao, M. Com., LL.M. Ph.D., LL.D.(Post-Doctoral Fellow), Judge-Judicial Preview, Andhra Pradesh.
It is remarkable that a seasoned Senior Police Officer of the Indian Police Service has been able to find time, energy and inclination to do an incisive study of such diverse topics as security of state and an important aspect of the corporate ladder such as "Cross Border Mergers and Acquisitions". It shows his thirst for knowledge and urge to share it with others by publishing his work.
- JUSTICE M. S. RAMA CHANDRA RAO, JUDGE, HIGH COURT FOR THE STATE OF TELANGANAThis book gives a comprehensive and lucid presentation on cross-border mergers and acquisitions framework in India, including a good insight into the interplay between the Companies Act, FEMA, SEBI Regulations, etc. it also makes an in-depth comparative analysis of the CBMA framework obtaining in India and the US. It should serve as a useful reference book for students, practitioners and policymakers.
- SRINIVAS INJETI, IAS
CBMA is particularly interesting because it is one such topic that is multidisciplinary nature and brings out the disciplines like economics, management (finance and strategy, in particular) and law together. Therefore, who but a scholar in all the three fields-- Dr. B. N. Ramesh, can address this topic more eloquently!! As an Indian Police Service Officer, and a double PhD holder, Dr. Ramesh is uniquely placed to address this topic from multiple perspectives. Dr Ramesh starts with the historical perspective of the CBMA, and extends his analysis to the current day laws and regulations that govern CBMA, especially in the US India relations…. Another nice feature of the book is, it provides a comprehensive perspective on how various laws-- competition law intellectual property law, et cetera-play a role in CBMA. Both for personal and professional reasons, I have the privilege of knowing Dr B. N. Ramesh for a while. In fact, I had the opportunity to have several in-depth conversations with him on several matters relating to economics, statistics, politics, national security, et cetera. In all these interactions, if there is one thing that catches my attention, it is his erudition-- the same erudition that comes across in his book as well.
- VISVANATH PINGALI, Associate Professor, Indian Institute of Management, Ahmedabad.
