BluSmart crisis: Investors tighten contracts
[ad_1] MUMBAI: Financial and corporate governance lapses at Gensol Engineering and its affiliate BluSmart have nudged investors to tighten the terms of investment contractsand incorporate additional clauses to protect their investments, lawyers told TOI. A series of frauds and governance mishaps at startups over recent years already made investors legally prudent, but now they are seeking more.For instance, they want founders and promoters to disclose their sources of income, said Maulin Salvi, leader, corporate governance practice at Nishith Desai Associates.They are also expanding the definition of bad leaver events (circumstances in which a founder or key employee exits the company under unfavourable conditions) and making the due diligence process more rigorous. Earlier, only criminal complaints against founders were considered a bad leaver event, allowing investors to remove them from their positions. Now, its ambit is being broadened to include breaches […]