The Insolvency and Bankruptcy Code, 2016 (IBC) came into force in August, 2016 replacing a host of existing insolvency laws.

The legislation was enacted to address increasing number cases corporate defaults in a regulated, time bound manner. It is also intended to stream line liquidation of NPAs, expedite debt recovery and insolvency resolution mechanism as a whole.

A whopping 2000 applications were filed ever since the legislation came into effect and the number is only increasing. Some very crucial decisions have laid out taken in the initial cases that were filed before the NCLT and the NCLAT.

In the noble quest of A K Mylsamy LLP to gain and share knowledge, the law firm has pioneered in bringing out an exhaustive knowledge base of insolvency and bankruptcy cases – To be inaugurated by Dr. M.S.Sahoo, the Chairperson of the Insolvency and Bankruptcy Board of India (IBBI) at Insights 2018 - an industry interaction event, the website aims to the premier the one stop solution for legal research on IBC cases, bringing to you judgements on IBC case laws that setting precedent(s) and paving the way for smoother insolvency resolution in the future.




New era for Cross Border Mergers

RBI’s latest notification

Section 234 of the Companies Act, 2013 (Companies Act) and Rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (Companies Merger Rules) permit mergers and amalgamations between Indian companies and companies incorporated in certain jurisdictions. These provisions mandate prior approval of the Reserve Bank of India (RBI) for any such cross-border mergers.

After extensive public consultations, the RBI vide notification No. FEMA 389/2018-RB issued the Foreign Exchange Management (Cross Border Merger) Regulations, 2018 (FEMA Regulations) on 20 March 2018 to address various issues that may arise in relation to cross border mergers from an exchange control perspective.

As per the Regulations merger transactions in compliance with these regulations shall be deemed to have been approved by RBI, and hence, no separate approval is required. In other cases, merger transactions require the prior approval of the RBI.
DID YOU KNOW?Maximum number of cross border M&A deals took place between 1990 and 2005 predominantly in the Asia Pacific Region as countries were just opening up their economies to other countries.

Mergers and Acquisitions – a bird’s eye view

According to Investopedia, the terms “merger and acquisitions’ are general terms used to indicate consolidation of two or more companies. In a merger the Boards of the companies merge and the ‘acquired’ company ceases to exist after being merged with the ‘acquiring’ company. In contrast, in an acquisition, the acquiring company obtains majority of shares / stake holding. There is no change in the name and the ‘acquired’ very much continues to function under law.

When mergers and acquisitions cross borders

In a nutshell, cross border mergers / acquisitions are:

  • When a company in one country is acquired by a company from another country(s)
  • Assets and liabilities of companies operating in two countries are combined into an altogether new legal entity
  • The acquiring company is called the “Home” country and the acquired company is called the “host” company
  • The registered office or headquarters can be situated in either of the two countries
  • The main motive is to increase FDI, revenue share in markets, cross selling, economies of scale and establishing a presence in other countries

The FEMA (Cross Border Merger) Regulations, 2018 – key features

The FEMA Regulations provide that any transaction undertaken in relation to a cross-border merger in accordance with the FEMA Regulations shall be deemed to be approved by the RBI (as required in terms of Rule 25A of the Companies Merger Rules). The FEMA Regulations also require the managing director/whole time director and company secretary of the company involved in such cross-border merger to furnish a certificate undertaking to ensure compliance with the FEMA Regulations along with the application made to the relevant National Company Law Tribunal (NCLT) in relation to such merger.

The terms “Inbound Mergers” and “Outbound mergers” have been expressly defined in the Regulations as: However, The Regulations have expressly omitted defining the term “Demergers”.

OUTBOUND MERGERS: A domestic company merges with a foreign company

INBOUND MERGERS: A foreign company merges with a domestic company

The Regulations provide for different compliances for Inbound and Outbound Mergers, the same is highlighted below:

Welcome move

The new regime has been widely welcomed as a positive move to boost Foreign Direct Investment in India. The procedure to pursue restructuring exercises has been made clearer. Indian Companies seeking a global platform are most likely to benefit. And most importantly, among the various benefits these Regulations bring to the corporate table; it provides the opportunity to Indian companies that have been declared as insolvent to be bailed out by foreign companies with ease and clarity of procedure.

A tête-à-tête with
L.Ganesh - Chairman, Rane Group


What has been the turning point of your life?

One of them was my exposure to Hindu Spirituality after my marriage

What do you consider your greatest achievement?

Realising that life is only series of learning experiences

What is your definition of success?

Achieving a balanced life which gives happiness and mental peace

What is the one principle that has carried you this far?

Ethical conduct in all one does

What is the one character trait or strength of yours that you admire the most?


What is the most valuable lesson learnt so far?

Realising that results need efforts but also divine blessing

What is the best indicator of your leadership?

Backing the team to take credit for results

What are your top two regular practices that have helped you in life?

Yoga and attending Vedanta lectures

What is your most important advice for time management?

Prioritization and planning

What is the single most important factor that clinches a deal?

A timely solution to the customer need

What is the most important factor in resolving conflicts?

Fair and transparent discussion

What is the most important indicator of performance of an organization?

Financial results defined as Return on Capital Employed

What is the most important factor to foster innovation?

Empowerment and tolerance to failure

What is a key factor in building and maintaining a strong team?

Good selection, rewarding performance and encouraging cross functional teams

If you are given an opportunity to live all over again what would you have done?

Difficult to answer. Whatever I am destined to do I will try to do following same principles that I believe in my current profession

What is that one thing that you wish to change in this world using your talent and potential?

A political system that either depends on corruption (democracy) or manipulation (autocracy)

How important is legal affairs to an organization and what should organizations do to attend to their legal affairs?

It is extremely important and is proportionate to size and International exposure of business

What is one professional tip that you would like to share?

Being honest and simple in thinking always helps



In the fortnightly podcast, Mr. A K Mylswamy shares details, judgement and anecdotes on Vishnu Sudha Textiles Vs Shri Nagananda Mills as the case is appealed to NCLAT.
Listen in!



History of Indian Law


Uberrima fides

The most abndant good faith; absolute and perfect candor or opens and honesty; the absence of any concealment or deception,however slight. A phrase used to express the perfect good fith, concealing nothing, with which a contract must be made; for example in the case of insurance, the inured must observe the most perfect good faith towards the insurer.


To annual; to set aside; to cancel or rescind. To render an act void; as, to vacate an entry of record, or a judgement. As applied to a judgement or decree it is not synonymous with “suspend”which man to stay enforcement of judgement or decree.


An order by which the drawer authorizes one person to pay a particular sum of money. An authority issued to a collector of taxes extended on the assesment roll, and to make distress and sale of goods or land in default payment.






Published in November, 2014, the book is a crime thriller written by the Kabul born US educated lawyer Victor Methos. Credited with running the most successful criminal defense firm in Salt Lake City, Utah, Victor wrote his first major best seller based on one case that left an indelible mark on him.

Brigham Theodore, the central character of the book, is “fresh out of law school” graduate. Out in the real world, he realises that the only way to survive is to be less ethical and out of desperation joins a seedy law firm in Salt Lake City. He begins to get more disillusioned about legal practice and his own practice when his senior hands him over a criminal case of capital murder. The case seems open and shut – a mother pulling a trigger on a sadist who kidnapped and killed her young daughter. The question is – whether Brigham will make her plead “guilty” and avoid a death sentence for her or fight the case based on ethics and save her life. Read on. Conclude.

The way to get started is to quit talking and begin doing.

Walt Disney

© Copyright 2018 - A K Mylsamy & Associates LLP

Indian Company

A company incorporated under the Companies Act, 1956 / 2013.

Foreign Company

Any company or body corporate incorporated outside India whether having a place of business in India or not.

Resultant Company

An Indian company or a foreign company which takes over the assets and liabilities of the other companies involved in the cross border merger.

Foreign Exchange Management (Transfer and issue of Security by a person Resident outside India) Regulations, 2017

Inbound merger

When securities are issued or transferred to a person who is a non –resident outside India


Foreign Exchange Management (Transfer or issue of any foreign security) Regulations, 2004

Inbound merger

Where the foreign company is a joint venture or a wholly owned subsidiary of the Indian company

Regulation 6 & 7 to be complied with if the merger with the joint venture or the wholly owned subsidiary results into an acquisition


Regulations relating to investment in Joint Venture or wholly owned subsidiary

Outbound merger

When the securities of a foreign company are acquired by a resident of India



Inbound merger

Any office of the foreign company situated outside India shall be deemed a Branch office of the resultant Indian company

Outbound merger

When the securities of a foreign company are acquired by a resident of India



Inbound merger

Any borrowings of the foreign company made before the inbound merger, will become the borrowings of the resultant Indian company. This will amount to External commercial borrowings (ECB). Therefore ECB rules must be complied with.

Outbound merger

Any borrowings o the Indian company made before the outbound merger, will become the borrowings of the resultant foreign company. They will have to be repaid in accordance with the scheme sanctioned by the NCLT.


Acquisition of Assets

Inbound merger

Assets can be acquired outside India by the resultant Indian company consequent to inbound merger, subject to RBI rules & regulations.

Outbound merger

Assets can be acquired in India by the resultant foreign company consequent to outbound merger, subject to RBI rules & regulations


Transfer of assets and or sale of securities

Inbound merger

Indian company transfer within 2 years from date of sanction of the scheme.

Outbound merger

Foreign company can transfer within 2 years from date of sanction of the scheme.


Opening of Bank account

Inbound merger

Resultant Indian company can open a bank account in the foreign country for a maximum period of 2 years from sanction of scheme.

Outbound merger

Resultant foreign company can open a bank account in India for a maximum period of 2 years from sanction of scheme. It has to be Special Non-resident rupee account.



Inbound merger

Done at arm’s length based on international pricing methodology and to be certified by a CA / merchant banker in either jurisdiction.

Outbound merger

Done at arm’s length based on international pricing methodology and to be certified by a CA / merchant banker in either jurisdiction