India: Company Law Committee report published by MCA

The Ministry of Corporate Affairs published, last month, a report by the Company Law Committee in which wide-ranging reforms were proposed: see here. The Committee has recommended, amongst other things, that the Companies Act 2013 is amended to (a) provide the Central Government with the power to require certain companies to be subject to joint audit; (b) recognise Special Purpose Acquisition Companies (SPACs); and (c) give Central Government the power to prescribe Rules to provide for greater use of electronic communication and the format (physical, electronic, hybrid) of shareholder meetings.

UK: England and Wales: Court of Appeal considers application of section 168(5) of the Insolvency Act 1986

Earlier this month the Court of Appeal gave judgment in Re Edengate Homes (Butley Hall) Ltd [2022] EWCA Civ 626. The case is of interest because of the discussion it contains concerning the application of section 168(5) of the Insolvency Act 1986. This provision provides that where "any person is aggrieved by an act or decision of the liquidator, that person may apply to the court; and the court may confirm, reverse or modify the act or decision complained of; and make such order in the case as it thinks just." Males LJ, with whom Stuart-Smith and Aplin LJJ agreed, stated (at para. [36]): 

It is not sufficient that an applicant for relief under section 168(5) is a creditor of the insolvent company. It must in addition have a legitimate interest in the relief sought. Where the application is to set aside a disposal of property by the liquidator, including the assignment of a claim, an applicant will have a legitimate interest if it is acting in the interests of creditors generally. Typically that will be the case when the effect of the relief sought will be to maximise the assets of the estate. But an applicant will not have standing if the relief sought is contrary to the interests of the creditors as a class, as it will be where that will result in a lesser recovery."

The case reached the Court of Appeal because, it seems, the trial judge was of the view that the case law authorities were inconsistent. This view was rejected by the Court of Appeal, with Males LJ observing: "the principles are clear and have been consistently applied" (para. [37]).

FATF publishes updated Recommendations

The Financial Action Task Force has recently updated its International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation (the FATF Recommendations): see here. The update relates to Recommendation 24 on the transparency and beneficial ownership of legal persons: see here for further information.

UK: England and Wales: multiple derivative claims

A very quick post to say: I see that permission to continue various claims has been refused by Mr Justice Leech in McGaughey & Anor v Universities Superannuation Scheme Ltd & Anor [2022] EWHC 1233 (Ch). Some claims were found not to be multiple derivative claims, as the claimants argued they were, while in respect of another - alleged breaches of directors' duties where directors continued to invest in fossil fuels without an immediate plan to divest contrary to the company's long-term interests - the judge held that the claimants lacked a sufficient interest or standing.

UK: FRC publishes updated International Standards on Auditing

The Financial Reporting Council has today published 29 updated International Standards on Auditing (UK): see here.