Pledging of shares: Do lenders need to rethink their strategy?

The laws that govern lenders and the right to invoke pledged shares

Ruchir Sinha, head of the PE and M&A practice at Nishith Desai Associates, and Mohammad Kamran, a senior member of the firm’s international litigation and dispute resolution practice, explain the laws that govern lenders, right to invoke pledged shares

What is the issue regarding the pledge of shares that has come to light recently?

The issue of invocation and sale of pledged shares by lenders has been drawing the headlines, particularly in case of Essel Group and Reliance ADAG. On one hand, Essel Group thanked its lenders for reaching an ‘understanding’ to not sell the pledged shares until a ‘speedy