Class action suits by shareholders in India

Abstract

Purpose

As a part of the overhaul of the corporate governance norms, the Indian Government recently introduced class action suits for shareholders in India. This paper aims to analyze the efficacy of the existing legislation in its present form. It also examines whether the Indian law is equipped to handle the globalized markets, wherein shareholders are spread across different continents.

Design/methodology/approach

The paper relies on meta-analyses. This study analyzes the existing case laws, news reports and legislative materials.

Findings

The author, through her analyses, has concluded that the introduction of class action suits into the Indian corporate governance regime is only a half-hearted attempt. The Indian lawmakers have failed to learn from their foreign counterparts. There are no provisions to deter frivolous litigation. Furthermore, it is contentious whether the Indian law will be able to cater to transnational class action suits.

Originality/value

This paper is original. There is a scarcity of literature on Indian corporate governance norms. This paper examines the very nascent concept of class action suits in India. India has become an investment hub in the past decade. Therefore, this paper has practical implications in understanding the Indian legal setup, in comparison to its foreign counterparts.

Citation

Bhomawat, D. (2016), "Class action suits by shareholders in India", Journal of Financial Crime, Vol. 23 No. 2, pp. 414-426. https://doi.org/10.1108/JFC-09-2015-0052