Arjya B. Majumdar

Arjya B. Majumdar is an Associate Professor at the Jindal Global Law School where he has taught corporate law related subjects since 2013. Between 2006 and 2013, he was a corporate transactions attorney advising large corporates and the Government of India on matters relating to M&A, Joint Ventures and PE, capital markets, and foreign investments. In terms of his research, Majumdar works on corporate ethics and social responsibility, corporate finance, M&A, capital markets and fintech. He has also been a visiting research fellow at the University of Liverpool, the National University of Singapore and the University of Melbourne.

Designation: Jindal Global Law School
Institution: Jindal Global Law School
Paper: The Enforceability of Contractual Investor Control Rights in Indian Private Equity Investments
Abstract: "Due to the role played by company promoters, extant laws, and a complex regulatory environment in India, Private Equity funds (PEs) prefer a minority position in Indian companies eschewing the leveraged buyout model seen elsewhere. As part of the investment PEs typically also negotiate a number of control rights, keeping in mind concerns related to minority shareholding in India. While these rights do not interfere with the everyday management of the company, they serve as a check against promoter opportunism. These rights include board nominees, quorum requirements and veto powers. Investors may also require downside protection such as anti-dilution and exit rights. While these investor control rights are departures from the default provisions under Indian company law, due to delays in the Indian judiciary, any disputes that may arise are privately resolved. Thus, the enforceability of these contracted rights have rarely been tested in court. This paper seeks to qualitatively identify the investor control rights typically negotiated by PEs using a sample of over 150 privately held Indian companies which have received investments from non-Indian PEs in the last five years. This paper will go on to analyse the limitations that Indian corporate and contract law place upon parties’ freedom to contract, thus examining whether the rights negotiated by PEs are enforceable. It is hypothesized that some of these rights may not be enforceable in their customary form."