FOR IPO FUND DIVERSION, SEBI RESTRICTS NIRMAN AGRI GENETICS’ FURTHER CORPORATE ACTIONS IPO FUND DIVERSION BY A SME FACTS OF THE CASE

 FOR IPO FUND DIVERSION,

SEBI RESTRICTS NIRMAN AGRI GENETICS’

FURTHER CORPORATE ACTIONS  

IPO FUND DIVERSION BY A SME FACTS OF THE CASE  

FACTS

SEBI has banned the SME-listed company Nirman Agri Genetics Ltd. (NAGL) from accessing the securities market over the alleged misuse and diversion of funds raised through its Initial Public Offering (IPO). 

SEBI's investigation found that the company allegedly diverted about ₹18.89 crore, which is approximately 93% of the total ₹20.30 crore raised through its March 2023 IPO. 

MODUS OPERANDI:  

The funds were reportedly transferred to entities that were either: 

• Fictitious or non-existent. 

• Suspect in nature. 

• Controlled by the company's promoter, Pranav Kailas Bagal, and his relatives 

SEBI'S ACTIONS: 

• Banned NAGL from accessing the securities market until further notice. 

• Restrained the promoter, Pranav Kailas Bagal, from buying, selling, or dealing in NAGL shares. 

• Halted all proposed corporate actions by the company, including a proposed bonus issue, stock split, and a change of name. 

OUTCOME  

The SEBI action is an interim order, and the investigation is ongoing.  

The company and its promoter have been given time to file their objections. 

SEBI findings led to the company's shares hitting the lower circuit. 

LEARNING  

This is a warning signal for all companies including SMEs who indulges in IPO as the SEBI is now acting as a watch dog to prevent funds diversion and frauds. 

R V SECKAR FCS, LLB 79047 19295 

NOW IT’S MANDATORY FOR ALL COMPANIES INCORPORATED ON OR AFTER JULY 14, 2025, TO FILE FORM ADT-1 WITH THE ROC UPON APPOINTING THE FIRST AUDITOR

 NOW IT’S MANDATORY FOR ALL

COMPANIES INCORPORATED ON OR AFTER

JULY 14, 2025, TO FILE FORM ADT-1 WITH

THE ROC UPON APPOINTING THE FIRST

AUDITOR 

WHAT TO SELECT IF AN INDIVIDUAL IS APPOINTED AS FIRST AUDITOR IN THE FORM ADT-1?

MCA’S #ADT1 UPDATE  
 

The Ministry of Corporate Affairs (MCA) has rolled out a key compliance change: It’s now *mandatory* for all companies incorporated on or after July 14, 2025, to file Form ADT-1 with the ROC upon appointing the first auditor—whether done by the Board, the members, or the CAG for government entities. 

 

WHAT IS NEW ? 

 

Before this change, the law did not require ADT-1 for first auditor appointments by the Board. Most companies only filed board resolutions and kept internal records.  

Now, the upgraded ADT-1 form includes specific options for “First Auditor by Board” and “First Auditor by Members”, making the reporting official, digital, and non-negotiable for all new companies. 

 

COMPLIANCE CHECK LIST FOR APPOINTMENT OF FIRST AUDITOR 

 

• Appoint first auditor within 30 days of incorporation   
  • File Form ADT-1 within 15 days of appointment  
  • Ensure the category “First Auditor by Board” or “First Auditor by Members” is ticked in the form  ADT-1. 

• 
  

WHAT TO SELECT IF AN INDIVIDUAL IS APPOINTED AS FIRST AUDITOR IN THE FORM ADT-1? 

If a Company appoints a Proprietorship Firm as its Statutory Auditor, while filing Form ADT-1 under MCA’s V3 portal  What  Should  one select “Firm” or “Individual”? 

 

It is to be noted that in the MCA V3 form  we should select the  “Individual” instead of firms. 

R V SECKAR FCS,LLB 79047 19295