The Quest For Fairness: Freezeout Mergers And The Burden Of Proof In The Indian Corporate Legal Landscape

Shahil Laskar, BBA LLB (H), Amity University, Kolkata

ABSTRACT

Mergers and Acquisitions (M&A) in India: The Companies Act, 2013, and the Securities and Exchange Board of India (SEBI) regulations control mergers and acquisitions. In the course of a merger or acquisition, two or more businesses are merged into one, or a business is purchased by another. The legal framework makes sure that such transactions are transparent, equitable, and that the interests of minority shareholders are protected.

Corporate mergers, particularly freezeout mergers, have gained significant attention in the Indian legal landscape due to their potential implications on minority shareholder’s rights and the need of proper principles of corporate governance. This research study investigates the fairness of freezeout mergers, and the burden of proof placed on different stakeholders in the Indian corporate legal framework.

The study employs a mixed-methods approach, integrating legal analysis with empirical data. Firstly, it analyses the relevant provisions of the Indian Companies Act, 2013, and the Securities and Exchange Board of India (SEBI) regulations governing mergers and acquisitions, with a focus on the protection of minority shareholders' interests during freezeout mergers. Additionally, landmark court decisions and legal precedents related to freezeout mergers are examined to assess the prevailing judicial stance.

The findings shed light on the prevailing trends and challenges in freezeout mergers, particularly in relation to the rights and protection of minority shareholders. The research also aims to identify potential gaps in the existing legal framework and offers recommendations for enhancing fairness, transparency, and accountability in the evaluation of freezeout mergers.

In conclusion, this research contributes to the ongoing discourse on corporate governance in India by providing valuable insights into the fairness of freezeout mergers and the equitable distribution of the burden of proof. The implications of this study are of significance to policymakers, corporate legal practitioners, market regulators, and all stakeholders concerned with fostering a fair and robust corporate ecosystem in India.5