Latest news with #ESOPs
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Business Standard
7 hours ago
- Business
- Business Standard
Summonses issued to Saluja's lawyers cause unrest among legal fraternity
Not taking kindly to the Enforcement Directorate's (ED's) summons -- later withdrawn -- to two senior advocates Pratap Venugopal and Arvind Datar, legal experts have said though the agency can send such notices, this should be done only in the rarest of the rare cases. 'Normally and ideally unless the ED has concrete clear and irrefutable evidence as to the complicity of the lawyer in the matter of circumvention of any criminal law, a lawyer is a professional and the rules of confidentiality govern the relations with the clients and therefore the lawyer should not ideally be subject to any kind of investigation,' senior advocate Sanjoy Ghose told Business Standard. 'It is the independence of the judiciary which is at stake because if agencies proceed against lawyers, then the lawyers will not be defending their clients,' Ghose said. The Supreme Court Advocates-on-Record Association (SCAORA) on Friday wrote to the chief justice of India, deploring the ED's action and seeking suo motu cognizance of the issuance of the summons to Venugopal. It said the ED's action had ramifications for 'independence of the legal profession' and the 'foundational principle of lawyer-client privilege'. Earlier this month, the ED had first sent notice to Datar, asking him to appear before the agency in connection with legal advice he had given Care Health Insurance on employee stock options (ESOPs) issued to former Religare Enterprises chairperson Rashmi Saluja. After protests from lawyers and representations before the Supreme Court, the notice was withdrawn. On June 18, the agency issued a second summons, this time to Venugopal in connection with the same issue. In its notice, the ED asked Venugopal to furnish records pertaining to communication between him and Care Health Insurance as well as Religare Enterprises. He was also asked to furnish these details on the legal opinion given for the grant of ESOPs to Saluja after the rejection of the grant by the insurance regulator. The summons also required Venugopal to tender details of payment made by Care Health, Religare Enterprises, and other associate entities against the legal service sought by the companies. He was asked to appear on June 27 before the assistant director of the ED in Mumbai. 'Legal opinion falls under the protection of attorney-client privilege. However, the issue becomes legally complex when legal opinion is allegedly used to facilitate an illegal transaction, such as money laundering or/and when the notice does not directly seek privileged communication, but circumstantial information such as payments received or internal communications,' said Alay Razvi, managing partner of law firm Accord Juris. Though lawyers can be summoned under procedural laws like the Prevention of Money Laundering Act (PMLA), 2002, it is contentious and opposed by the legal fraternity, Razvi said. Himanshu Vidhani, partner at law firm Chandhiok & Mahajan, said the ED issuing summons to Datar and Venugopal appeared to be unprecedented. Section 132 of the Bharatiya Sakshya Adhiniyam, 2023 (previously Section 126 of the Indian Evidence Act), provides protection of the attorney-client privilege. The Madras High Court had in 2002 deprecated the issuance of a summons to an advocate. 'Allowing investigative agencies to question advocates on advice given to clients would destabilise the foundation and independence of the legal profession, particularly in connection with criminal and white collar defence,' said Divyam Agarwal, partner at law firm JSA Advocates & Solicitors. Chinmay Bhosale, advocate at Bombay High Court, said: 'In no way can an advocate be considered responsible for his or her client's actions.' An ED statement said: 'ED has issued a Circular for the guidance of the field formations that no summons shall be issued to any Advocate in violation of Section 132 of the Bhartiya Sakshya Adhiniyam, 2023. Further if any summons needs to be issued under the exceptions carved out in proviso to section 132 of the BSA, 2023, the same shall be issued only with the prior approval of the Director, ED.'
India Today
8 hours ago
- Business
- India Today
ED bars summons to advocates, exceptions need director's approval under law
The Enforcement Directorate (ED) on Friday issued a circular instructing its field formations not to issue summons to any advocate in violation of Section 132 of the Bhartiya Sakshya Adhiniyam, 2023. This section states that no advocate, at any point of time, should disclose any communication made to him without the client's circular mandates that any summons under the exceptions to this provision require prior approval from the Director of the Enforcement comes amid the probe agency's investigation into a money laundering case involving Care Health Insurance Ltd (CHIL) concerning the issuance of Employee Stock Options (ESOPs) at significantly undervalued prices. The case centres around the Employee Stock Ownership Plans (ESOPs) issued on May 1, 2022, which were reportedly priced much lower than market value. This issuance allegedly took place despite a formal rejection of the ESOP proposal by the Insurance Regulatory and Development Authority of India (IRDAI).As part of the ongoing probe, the ED summoned Pratap Venugopal, an independent director of CHIL, to ascertain the circumstances surrounding the issuance of the ESOPs and the board's discussions following IRDAI's rejection. However, given that Venugopal is a senior advocate practicing in the Supreme Court, the summons issued to him has now been ED said that any documents required from him in his capacity as an independent director will be requested via July 23 last year, the IRDAI directed CHIL to revoke or cancel any ESOPs that remain unallotted. In addition, the regulator imposed a penalty of Rs 1 crore on CHIL for non-compliance with its Watch
Time of India
19 hours ago
- Business
- Time of India
ED summons senior advocate Pratap Venugopal over legal opinion given to Care Health Insurance
The Enforcement Directorate has summoned Senior Advocate Pratap Venugopal over legal advice given to Care Health Insurance on the ESOP (employee stock ownership) issued to former Religare Enterprises chairperson Rashmi Saluja . Venugopal has now told The Economic Times that the opinion was sought by him in his role as Advocate-on-Record and Partner at K J John and Co., from Arvind P. Datar , Senior Advocate. 'I thereafter resigned as a partner with effect from 31.01.2025, when I was designated as a Senior Advocate on 19.01.2025, as required by the Senior Advocates Designation Rules.' by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like New Container Houses Indonesia (Prices May Surprise You) Container House | Search Ads Search Now Undo Sources close to the matter also told ET that no fee was charged by Venugopal from Care Health Insurance. The summons issued to Venugopal requires him to furnish inter alia all records pertaining to communication between him and Care Health Insurance Ltd (CHIL)/M/s Religare Enterprise Limited (REL) regarding legal opinion for the grant of ESOPs to Dr Saluja after rejection of the grant by IRDAI. Live Events The summons also required Venugopal to tender details of payments made by M/s CHIL/M/s REL/Associated Entities against the legal services sought. He was asked to appear on June 27 before the ED Assistant Director, Mumbai. Earlier, ET reported that ED had issued summons to Arvind Datar over his legal advice to Care Health Insurance on the ESOP issued to Dr Saluja. Later, the summons was reportedly withdrawn, following backlash.
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Business Standard
a day ago
- Business
- Business Standard
'Much-needed relief': Startups on Sebi reforms relaxing ESOP norms
The ease in norms from the Securities and Exchange Board of India (Sebi) comes at a time when multiple Indian startups such as PhonePe, Zepto, Pine Labs Udisha Srivastav Peerzada Abrar Ajinkya Kawale New Delhi/Bengaluru/Mumbai Startups are hailing SEBI's latest reforms as a much-needed relief, calling them a timely move that removes key hurdles in the IPO journey. The easing of stock holding norms for founders and simplification of rules for existing investors to participate in offer-for-sale (OFS) components are expected to boost listing plans for new-age companies. The ease in norms from the Securities and Exchange Board of India (Sebi) comes at a time when multiple Indian startups such as PhonePe, Zepto, Pine Labs, among others are targeting to go public soon. Over 30 startups, with a cumulative value of $100 billion may go public in the next two years, a report by The Rainmaker Group shows. Harshil Mathur, CEO and co-founder of fintech giant Razorpay, said 'SEBI's move marks a defining moment for India's startup ecosystem. By empowering founders to stay invested and easing the road back home, this step fuels a future where the best Indian companies are built, scaled, and celebrated right here. It's not just a policy tweak, it's a signal that India is ready to be the world's innovation hub,' said Mathur. The markets regulator's proposal allows founders to retain share-based benefits such as employee stock ownership plan (ESOP) at the time of filing their draft red herring prospectus (DRHP), on the condition that these benefits are granted one year prior to filing the document. "This move brings more flexibility and fairness to how founders stay invested. It also reduces the friction for good companies to go public," said Vikram Chopra, founder and chief executive officer (CEO) of auto-tech platform CARS24. 'It's also a change many in the ecosystem, including us at CARS24 have been requesting for a while. The capital markets benefit when the people building businesses remain motivated to stay the course. This is a step in the right direction,' said Chopra. Bankers explained that the market regulator usually insists on categorising founders as promoters as they have a controlling say in the management. Earlier, traditional promoters and founders of startups, were barred from holding share-based benefits since there was no distinction between the two. However, startup cap-tables go through rounds of dilution during fundraise with founders dependent on ESOPs. Startup founders explained that the new norms may enable healthier exits for early teams and founders. "SEBI's ESOP reforms are a much-needed recognition of the long-term skin in the game that founders bring to the table. By allowing founders to retain ESOPs granted before the IPO, the move removes a structural bias that discouraged listings and limited wealth creation," said Abhiroop Medhekar, co-founder and CEO, of Velocity, an e-commerce enablement platform. 'This positive reform comes as a big relief to founders of new-age companies as it will enable them to avail skin-in-the-game benefits and align their interests with other shareholders,' said industry body Startup Policy Forum (SPF) It streamlines how accredited investors, already participants in AIFs, can co-invest in high-conviction opportunities alongside fund managers, aligns India with global norms, and removes longstanding friction around such structures. "This will further increase the flow of private, especially domestic capital, to entrepreneurial and growth businesses. By limiting CIVs to accredited investors, SEBI has also signaled a shift toward more principle-based, lighter-touch regulation for qualified participants," said Gopal Srinivasan, Chairman and Managing Director of TVS Capital Funds and Senior Board Member, Indian Venture and Alternate Capital Association (IVCA). Executives added that the move will enable investors to participate in funds with ease. "We often have sophisticated investors who want the option of co-investing but struggle for lack of appropriate structures to do so; especially global institutional investors and family offices. With this change, within the same scheme one is able to offer co-investments to such investors and therefore makes the proposition far more attractive and tenable. This will certainly help us bring on some marquee investors into the fund," Abhishek Prasad, managing partner at Cornerstone Ventures said.
NDTV
a day ago
- Business
- NDTV
"Bengaluru Is Exhausted": Startup Founder Shares 3 "Corporate Concerns" Shaking Up The City
A startup founder has triggered a discussion online after describing Bengaluru as a city grappling with a quiet but collective burnout. In his LinkedIn post, Karan Raghani shared his observation after spending ten days in the Silicon Valley of India. During his visit, he met with a diverse mix of professionals, including founders, marketers, techies, product managers and designers. Reflecting on his interactions, he wrote, "I've been in Bengaluru for the last 10 days. Met founders, marketers, techies, product folks, designers, and one guy who quit his job to become a full-time meme page admin (my ultimate professional goal). And there's something no one's saying out loud. The city is exhausted." "Yes, the coffee's still strong, the startups are still pivoting, and the LinkedIn posts continue to thrive! But under all that hustle lies a deep, collective burnout. People are surviving on caffeine, wifi drops, and a distant dream of work-life balance," he added. Further, Mr Raghani identified three major corporate concerts currently shaking up Bengaluru. First, dubbed "Marathahalli Bridge Syndrome", refers to the city's notorious traffic snarls. "People are spending more time here than in their own homes. As they say, to succeed in life, you must cross many bridges. Marathahalli Bridge is one of them. Twice a day," he remarked. Second, Mr Raghani noted how Bengaluru's famously pleasant weather is influencing professional routines in surprising ways. "People are now blocking their calendars just to yawn and spread the nap mode. Saw someone blocked a slot for "out for a breezy walk" on their calendar," he wrote. Third, the founder noted is the 6 am auto crisis. "Auto drivers here are unofficial life coaches, teaching you rejection, negotiation, and detachment," he wrote. Calling it the "most brutal" challenge, he joked that asking for a ride to Indiranagar or Whitefield often results in vanishing drivers or the infamous "MINUS" reply. In his post, Mr Raghani also spoke about the government's decision to ban Rapido bike taxis. "For many of us, Rapido bike taxis were the Roman Empire, a constant saviour, a shortcut to freedom. But starting today, even that's been banned by the state government," he wrote. Concluding his post, Raghani humorously wrote, "If you survived all three, you qualify for ESOPs in emotional damage." The post has struck a chord with many professionals, both inside and outside the city. Reacting to it, one user wrote, "A surprisingly accurate pulse on urban hustle culture-with humor that hits. Beyond the laughs, it really speaks to the work-life imbalance so many are quietly enduring. Thanks for sharing Karan." "Reading your post, I was reminded of my burnout Karan! I would say it helps not to be reminded about it. Just bury it deep down," said another. "Love this, Karan. Hoping that someday, we will be able to dig deep beneath that exhaustion, and reconnect with our old, green, slow, fan-less Bangalore filled with pink blossoms and palash trees, broad, lazy roads and lots of time on our uru!!!!" commented a third user.
