This article is written by Komal Shah, Content Head, LawSikho.
“So when are you ringing the bell?”
Even after so many years of being asked this question, I still remember it vividly. I was just looking at the person who asked the question as if to say “Huh?” and the person sitting next to me was giggling.
Of course, at that time, I didn’t know that ‘ringing the bell’ referred to the traditional gong being hit by the Chairman of a company signifying the start of trading in the shares of a company at a listing ceremony.
My company was in the middle of IPO processes. I remember that the team here was so young, charged up, dynamic and vibrant that if you got in the middle of this team, you would begin to get charged up from all the energy in the air (somewhat similar to what the LawSikho team feels like now).
They had chosen a day that signified the greatest fall in the markets as the right day to list – not because it wasn’t likely to happen again, but because they firmly believed they could turn history upside down. And over the years, they have indeed done that.
IPOs are exciting. You can literally feel an adrenaline rush during the IPO days while an issue is being subscribed and oversubscribed.
For legal and company secretarial professionals who get to work on an initial public offering, this isn’t something they are likely to get to be involved in for multiple number of times.
At the same time, it is also daunting for someone who hasn’t been through the process and doesn’t know what it entails. So many processes would be ongoing at the same time that unless you have been groomed properly, you can completely lose the plot.
There are some terms you will totally not get, unless you have been in this zone. For instance, if you’re a newbie, you wouldn’t get what a ‘roadshow’ is supposed to achieve, in relation to a public issue. I’ll leave that for you to google.
You can learn some real life lessons while going through major corporate transactions like IPOs and takeovers. These will grill you and shape you.
I want to share some learnings with you here.
God is in complete execution
During the IPO, one of the intermediaries was supposed to be sent copies of an agreement. I got these hand delivered. To my suprise, after some time, they ended up simply denying having received the agreement.
I had clearly asked the peon delivering the agreement to get an acknowledgement of receipt on a photocopy and he had done that. I now had that acknowledged photocopy in my custody so I simply stated that I had an acknowledgement of receipt. Unsurprisingly, there were no further calls in this regard from that intermediary.
If I hadn’t done this, they would’ve ended up putting me in the wrong place in front of my management while actually, it was they who could not trace the agreement.
As a lawyer, expect such situations all the time. Keeping records of every imaginable and unimaginable thing is part of your profile. Those who manage to produce records out of thin air at the critical moment often win more arguments than the most quick thinking lawyers.
In another adventure, I was managing communications to the employees during a takeover and proposed delisting.
It was such a detailed exercise that I had to put in 100% focus on the figures and everything else, since the employees, in this case, were spread throughout the world.
These communications had to be sent to the employees before a certain deadline date.
I had not only sat through completing all of these letters, but also gotten into arranging these appropriately on a large table in a big conference room and placing these into appropriate envelopes.
Till a certain point, I was also there right up to the point that the administrator was stamping those envelopes. I was a bit relieved that now these were done and dusted, so I left. And here is where I missed the bus. Some of the envelopes ended up being posted without being stamped. Obviously these were returned.
You ought not to leave the ground until it is complete. It’s not done till it’s done.
Be conscious not only of what you speak, but also where you speak
I almost ended up being caught in the clutches of insider trading once.
In my capacity as the company secretary, I would have access to a significant amount of unpublished price sensitive information. One day, I was walking through the aisle in the large open plan sitting area of the company and one of the department heads (classified as an insider) walked up to me. He just wanted to know whether the trading window was open or closed in the event he wanted to sell his shares.
I told him that the window was open.
Unfortunately, this conversation happened close to the desks of a couple of people, who came up to me and said “Anything wrong? Should we sell?”
I clarified that I cannot make a statement like that. All I had informed the department head was that the window was open. But imagine what disaster it would have been if these guys decided in their heads that the shares need to be sold and had spread that news throughout.
Lesson learnt: these kinds of conversations are not to be had in the aisles.
Insider trading is probably the most litigated of the SEBI regulations before the Securities Appellate Tribunal (SAT).
We have therefore, curated the Executive Certificate Course on Securities Laws, Capital Markets, Insider Trading and SEBI Litigation to include not only the full explanation and range of instances which might be considered insider trading, but also covered how you can deal with insider trading matters during litigation.
Getting hit by a bus – step up and own your learning
I know this heading looks completely out of place. But this is exactly the statement one of my managers used – to groom me into taking on and knowing the entire inside out of the work. His frequent question was “What if I get hit by a bus tomorrow?”
How was I going to handle things if my boss disappeared suddenly?
His question turned out to be a life saver for me when I had to unexpectedly handle a takeover on my own on account of his hospitalisation.
I was prepared. So much so that at the end of the transaction, I received a call of appreciation from the CFO himself.
In a nutshell, be forthcoming, step up and take on learning everything there is to be learnt, about the company and its business. It can be a blessing during the taxing transaction times.
What this would also mean is that if you have a listed or to be listed employer or client, brace yourself with the knowledge of all laws that can impact your employer or client.
You would never know where which piece of knowledge can come in handy and save your life. For this reason, we have included the full gamut of SEBI regulations that you would come into contact with in your travails with a listed entity in the Executive Certificate Course on Securities Laws, Capital Markets, Insider Trading and SEBI Litigation.
Always have systems. In the legal and compliance domain, you alone are never enough.
The rapidity with which we forget things is amazing. Unless you have a complete system in place for ensuring compliance for a listed entity, I can tell you that there will be some ball that will be dropped somewhere either in the run up to getting listed or thereafter.
You need to have in place a constant practice of building, implementing and improvising systems as need be, when you are dealing with a regulated entity. Having systems not only increases efficiency, but also saves you to a good extent from missing out on things. Not only that, if you are able to demonstrate to a regulator that you have appropriate systems in place, there are chances for you to convince them that the error was a one time miss, and that you are rectifying the systems appropriately. This can work great in reducing penalties.
This is precisely why we include a discussion on systems throughout our Executive Certificate Course on Securities Laws, Capital Markets, Insider Trading and SEBI Litigation. The course talks about systems you need to have in place in relation to publicity during an IPO, systems required to be developed while transitioning from an unlisted to a listed company status, systems you need to have in place if you are an intermediary and systems you need to improvise if you land up receiving a Show Cause Notice (SCN) from SEBI.
Here are the courses you can enroll in:
DIPLOMA
Diploma in Entrepreneurship Administration and Business Laws
Diploma in Companies Act, Corporate Governance and SEBI Regulations
Diploma in Intellectual Property, Media and Entertainment Laws
Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution
Diploma in Cyber Law, Fintech Regulations and Technology Contracts
EXECUTIVE CERTIFICATE COURSES
Certificate Course in Media and Entertainment Law: Contracts, Licensing and Regulations
Certificate Course in Capital Markets, Securities Laws, Insider Trading and SEBI Litigation
Certificate Course in Advanced Corporate Taxation
Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting
Certificate Course in National Company Law Tribunal (NCLT) Litigation
Certificate Course in Prevention of Sexual Harassment at the Workplace
Certificate Course in Arbitration: Strategy, Procedure and Drafting
Certificate Course in Trademark Licensing, Prosecution and Litigation
Certificate Course in Labour, Employment and Industrial Laws for HR Managers
Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.
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