Right of First Refusal Is Not a Restriction on Free Transferability Under Section 111A
1. The concept of free transferability of shares in a public company under section 111A of the Companies Act, 1956 is perhaps the most significant unresolved controversy in contemporary Indian corporate law. Time and again the issue has arisen whether the right of first refusal (pre-emptive rights) in the shareholders’ agreement and joint venture agreement constitute restriction on the free transferability of shares. Right of first refusal is a commonly used device in the corporate world. Under the right of first refusal, a second party planning to exit the company, is obliged to give the first party ( promoter) an opportunity to buy the shares before the shares can be sold to a third party which is an outside party. This is basically to prevent an easy entry of third party into the company by purchasing shares from the party who wish to exit the company. Many corporates, unlisted as well as some listed ones, have such agreements with large shareholders.
Right of first refusal whether violate section 111A
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Guide to HIPAA Changes in the Stimulus Package
It is old news that President Obama signed the American Recovery and Reinvestment Act, popularly known as the Stimulus Package, into law last month. What hasn’t made the news are the dramatic changes the law makes to HIPAAs (Health Insurance Portability and Accountability Act) Security Rules. The changes subject business associates to the rules, requires notifications for breaches, expands who may seek damages and increases penalties for violations. Here are just some of the biggest changes to the HIPAA Security Rules.
Arguably the biggest change is the expansion of who is covered under HIPAA. The law now places the same security requirements to business associates as covered entities. This includes the administrative, physical, and technical safeguards mandated by the Security Rule. This will require every business associate to appoint a security official, develop written procedures, and train its workforce on safeguarding private health information. In short they need better data security from creation to shredding. A business associate is now also subject to civil and criminal penalties under HIPAA.
Air Methods and the New Health Care Law – How Long Can They Survive?
While the problems with the health care bill that passed in March are no longer front page news, that doesn’t mean American businesses still aren’t scrambling to assess the damage. Just last month we learned why the House Democrats really canceled a hearing scheduled for April where they were planning on excoriating business like AT&T (T), Caterpillar (CAT), and AK Steel (AKS) for taking write-downs on future health care retiree expenses caused by the bill. It turns out they were just following proper accounting practices, as the companies had said all along. That wasn’t the real reason the hearings were canceled though. In the document requests to these companies, internal emails showed they were considering simply canceling coverage for employees, paying the necessary fine, and pushing employee coverage off to the government. Health care bill advocates had promised this wouldn’t happen, so they didn’t want to publicize it. Not only that, but emails also showed companies would be raising the amount they would make employees pay towards their premiums which, again, bill proponents said wouldn’t happen.
The news cycle has turned, but these problems with the bill haven’t disappeared. While advocates sought to increase coverage and reduce prices, the opposite will be occurring, starting much sooner than when the bill is in full effect. As a bottom-up stock picker, I’d like to discuss a case study in price controls. My favorite example is a company named Air Methods (AIRM), and it would be worthwhile for politicians to examine this company and their revenue and expenses. The health care bill will both cause Air Methods to increase prices charged to insurance companies, who will then have to pass along those costs to customers. When their inevitable future price increases don’t stick with insurers, they will eventually be forced to curtail service.
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