Lens on fund-raising and whether cos operate within the contours of the law
Sugata Ghosh & Reena Zachariah
Mumbai: Angel networks which serve as vital link between startups scrounging for funds and faceless investors, are being scowled at by the financial market regulator.
The Securities & Exchange Board of India has shot off notices to at least half a dozen angel firms in the past one-and-a-half months, asking them to spell out details of their fund-raising business and explain whether they operate within the contours of the securities market law. Though angel networks help startups raise seed money, Sebi, besides being worried about
small investors, fears that these little-known electronic platforms are treading in a regulatory twilight zone — by playing matchmakers in equity or debt market, they are acting like stock exchanges which they are not authorised to do. And, by facilitating issuance of securities to more than 200 investors, some networks may be violating the rules of private placement. A stern view by Sebi could throttle the source of finance to many fledging startups which are untouched by highstreet banks.
Since procedural and material costs of a Supreme Court appeal are quite high, the number of appeals to be filed in the top court after a verdict from court of appeals is expected to be low. Judges for these new courts will be recruited from among the “brighter members” of the cadre of district court judges as well as from the Bar.
A number of courts of appeal is likley to be formed under the ju- risdiction of each high court, and case disposal norms or targets may be set for these courts. Setting up the courts of appeal will be a big administrative exercise and may require changes in some rules governing the present system.
The idea that an alternative mechanism was needed to hear all statutory appeals and therefore, decongest the legal system was firmed up at a recent top-level meeting attended by senior officials from the Prime Minister’s Office, the cabinet secretary, and
secretaries from ministries of finance, department of personnel and training, law and Niti Aayog. Two Supreme Court judges represented the top court at the meeting. ET has reviewed the minutes of the meeting.
Criminal and civil appeals account for most pending cases — many cases lingering on for years or even decades. At the meeting, both judges and officials noted the need for speedy delivery of justice and unburdening higher courts. The meeting also took note of data that showed the huge burden on high courts.
The minutes of the meeting noted: “Delay in decision of
criminal cases, particularly in category of serious cases where granting bail was not safe, was not a satisfactory situation.. search for structural alternative was the imperative need of the hour”.
The meeting also noted that other areas of appellate jurisdiction in high courts, for example, second appeals, matrimonial matters, accidental claim cases, land acquisition cases, also call for prompt disposal but get delayed because of high pendency.
As many as 16.29 lakh cases in high courts are more than five years’ old, and 7.43 lakh cases are pending for 10 years, the meeting noted.