TATA CAPITAL PAYS RS 14.4 LAKH TO SEBI TO SETTLE REGULATORY VIOLATION IN THE ISSUANCE OF UNLISTED CUMULATIVE REDEEMABLE PREFERENCE SHARES (CRPSS)

TATA CAPITAL PAYS RS 14.4 LAKH TO

 SEBI TO SETTLE REGULATORY

 VIOLATION  IN THE ISSUANCE OF

 UNLISTED CUMULATIVE REDEEMABLE

 PREFERENCE SHARES (CRPSS) THAT

 WERE DEEMED A PUBLIC ISSUE AS IT

 HAD BEEN ISSUED TO MORE THAN 200

 INVESTORS IN A FINANCIAL YEAR

DETAILS OF THE REGULATORY VIOLATION

The matter relates to two instances where Tata Capital issued unlisted CRPSs on a private placement basis between April 2015 and March 2017. The issue arose because these shares were subsequently down-sold to more than 200 investors within a financial year, which, under the Companies Act 2013 and SEBI regulations, automatically classifies the issuance as a "public issue". Public issues are subject to stricter disclosure and compliance requirements, which the company allegedly did not follow. The Settlement Process

SUO-MOTU (VOLUNTARY) SETTLEMENT APPLICATION

Tata Capital submitted a suo-motu (voluntary) settlement application to SEBI, which allowed them to resolve potential enforcement proceedings without either admitting or denying the regulatory findings. The settlement amount of Rs 14.4 lakh was remitted by Tata Capital on October 24, 2025, after which SEBI declared the matter settled, effectively closing the regulatory chapter

LESSONS LEARNED FROM THIS CASE STUDY

This settlement is part of SEBI's framework that allows entities to avoid prolonged litigation by paying a fee and, if required, implementing corrective measures.

The issuance of these CRPSs is deemed to be a "public issue"  if it is issued to more than 200 investors in a financial year and the applicant is in violation of the provisions of Companies Act 2013 and SEBI's (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013

TATA CAPITAL PAYS RS 14.4 LAKH TO SEBI TO SETTLE REGULATORY VIOLATION  IN THE ISSUANCE OF UNLISTED CUMULATIVE REDEEMABLE PREFERENCE SHARES (CRPSS) THAT WERE DEEMED A PUBLIC ISSUE AS IT HAD BEEN ISSUED TO MORE THAN 200 INVESTORS IN A FINANCIAL YEAR

R V SECKAR,FCS, LLB, 79047 19295

TWO EBOOKS FOR SALE AT 50% DISCOUNT-Book 1- Compliance Issues in Corporates -Book -2 - Governance, Risk and Compliance

 TWO EBOOKS FOR SALE AT 50% DISCOUNT

Book 1- Compliance Issues in Corporates -247 pages

 

Book -2 - Governance, Risk and Compliance : A comprehensive approach for leaders page 60

The eBook titled Compliance Issues in Corporates and How to Mitigate It offers valuable insights for professionals by highlighting the serious financial, legal, and reputational risks associated with non-compliance and providing practical strategies to manage these challenges effectively.

Please scan the QR Code and make payment of Rs 1000/= and share the screen shot through email. PDF online copies and fillip eBook link will be sent through email.

 

R V SECKAR, FCS , LLB

79047 19295

Rvsekar2007@gmail.com

 

COMPLIASCE OVERSIGHT TURNS EXPENSIVE FOR IQMETRIX AND IT PAID RS 13 LACS PENALTY OVER NON-COMPLIANCES

 

COMPLIANCES OVERSIGHT TURNS EXPENSIVE FOR IQMETRIX AND IT PAID RS 13 LACS PENALTY OVER NON-COMPLIANCES

TWO FOREIGN DIRECTORS WERE FINED-SIGNIFIES USE OF PROFESSIONAL ADVISES TO OVERCOME NON-COMPLIANCES

ROC Bangalore VS IQMETRIX Software Development India Private Limited

ROC Bangalore, has recently issued multiple adjudication orders under Section 454 of the Companies Act, 2013 against IQMETRIX Software Development India Private Limited for various statutory non-compliances. All matters were initiated through suo-motu applications filed by the company, admitting the lapses.

𝑪𝒐𝒎𝒎𝒐𝒏 𝑫𝒊𝒓𝒆𝒄𝒕𝒐𝒓𝒔 𝑷𝒆𝒏𝒂𝒍𝒊𝒔𝒆𝒅 𝑨𝒄𝒓𝒐𝒔𝒔 𝑶𝒓𝒅𝒆𝒓𝒔:

Christopher David Krywulak, Kelly Dean Kazakoff and Shailesh Srivastava

𝑪𝒐𝒎𝒑𝒍𝒊𝒂𝒏𝒄𝒆 𝑰𝒏𝒔𝒊𝒈𝒉𝒕𝒔:

✔ Timely filing of MBP-1 is essential to disclose directors’ interests.

✔ Mandatory Board Meetings must be convened within prescribed frequency.

✔ Financial statements must be approved by the Board before signing.

✔ Share certificates must be issued within 60 days to avoid penalties.

✔ Suo-motu action is viewed positively but does not eliminate penalty exposure.

💡 𝑻𝒂𝒌𝒆𝒂𝒘𝒂𝒚 𝒇𝒐𝒓 𝑪𝒐𝒓𝒑𝒐𝒓𝒂𝒕𝒆𝒔 & 𝑷𝒓𝒐𝒇𝒆𝒔𝒔𝒊𝒐𝒏𝒂𝒍𝒔

- Even unintentional delays or procedural lapses can lead to significant financial penalties.

- Strong governance, regular compliance reviews, and board oversight mechanism

Courtesy :

SUDHA VASUDEVAN

 

R V SECKAR,FCS,LLB ,79047 19295,

SEBI (LODR) (Fifth Amendment) Regulations, 2025--MAJOR CHANGES AND IMPACT FOR LISTED ENTITIES

 SEBI (LODR) (Fifth Amendment) Regulations, 2025--MAJOR CHANGES AND IMPACT FOR LISTED ENTITIES

CLICK THE FOLLOWING LINK TO SEE THE LINKEDIN POSTING

https://www.linkedin.com/posts/activity-7400505019353030656-z4KU?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAE_E5oBjgpaFS276L2s04BDTAB37RGoZu8

DIRECTORS SIGNED FINANCIALS WITHOUT BOARD’S APPROVAL- ROC BENGALURU IMPOSED A FINE ON THE COMPANY AND DIRECTORS RS 4,50,000

 DIRECTORS SIGNED FINANCIALS WITHOUT BOARD’S APPROVAL- ROC BENGALURU  IMPOSED A FINE ON THE COMPANY AND DIRECTORS RS 4,50,000

ROC,BENGALURU VS IQMETRIX SOFTWARE DEVELOPMENT INDIA PVT LTD

FACTS OF THE CASE

ROC observed that the financial statements had been signed by directors without the financials being first approved by the Board of Directors, as required under the Companies Act, 2013.

 

SECTION 134(1) & 134(2) – COMPANIES ACT, 2013

Financial statements must be approved by the Board before they are signed.

 

Signing of financial statements must be done after such approval, by:

·      Chairperson (if authorized), or

 

·      Two directors (one must be MD, if any), or

·      CEO/CS (where appointed).

SECTION 134(8)

Non-compliance with Section 134 attracts penalties on the company and every officer in default.

KEY TAKEAWAYS

·      Board approval of financial statements is non-negotiable.

·      Even if financials are correct, procedural non-compliance attracts penalties.

COMPANIES MUST:

·      Hold a valid Board meeting,

·      Record approval in minutes,

·      Then sign and file the financials.

NON COMPLIANCE

·      It was an inadvertent mistake or procedural lapse.

·      No intention to evade or suppress information.

·      Financials were accurate; only the approval process was missed.

Despite of the above facts, it is an offence to sign the financials by the directors without Board’s approval.

This case is highlighting that it is important for the companies to engage a company secretary to give them correct advice to avoid penalties.

R V SECKAR, FCS, LLB, 79047 19295

 

SIMPLIFIED PROCESS FOR ISSUING DUPLICATE SHARE CERTIFICATES BY SEBI

SEBI’S CONSULTATION PAPER

SEBI’s consultation paper proposes to simplify and standardize the process for issuing duplicate securities certificates to enhance ease of investment.

The consultation paper proposes raising the simplified documentation threshold from Rs. 5 Lakhs to Rs. 10 Lakhs.

PRESENT REQUIREMENT FOR ISSUE OF DUPLICATE CERTIFICATE

CURRENTLY, INVESTORS MUST SUBMIT

1.A copy of FIR/police complaint/court order,

2.Publish a newspaper advertisement, and

3.Provide separate affidavit and indemnity bonds, except when the value of securities is below Rs. 5 Lakhs.

PROPOSED SIMPLIFIED DOCUMENTATION REQUIREMENTS

Investors would no longer need to furnish lengthy or complex paperwork.

The proposed framework includes:

1.Standard templates for applications

2.Streamlined affidavit/indemnity formats

3.Relaxed requirement for surety in certain cases

4. SEBI is considering reducing notarisation/legal formalities, especially for small shareholders, to improve ease of doing securities-related processes.

5. Greater use of digital modes, e-verification and online workflow, enabling quicker turnaround time by RTAs/companies.

6. Still the shareholder has to file a FIR

ENHANCED INVESTOR PROTECTION

While simplifying procedures, SEBI also proposes safeguards such as:

1.Mandatory PAN / KYC verification

2.Intimation to registered contact details before issuing a duplicate certificate

3.Strict timelines for RTAs to respond

ADVANTAGES

SEBI Says this move would simplify procedures, minimize costs to shareholders and will offer restitute rights for those who hold securities in physical forms.

R V SECKAR FCS,LLB 79047 19295

IT DEPARTMENT TELLS CHARITABLE TRUSTS TO ADD IRREVOCABLE CLAUSE IN THEIR TRUST DEEDS- WHAT IT MEANS?

 IT DEPARTMENT TELLS CHARITABLE TRUSTS TO ADD IRREVOCABLE CLAUSE IN THEIR TRUST DEEDS- 

                    WHAT IT MEANS?

 “IRREVOCABLE CLAUSE” IN THEIR TRUST DEEDS

The Income Tax Department has recently been insisting that charitable and religious trusts include a clear “irrevocable clause” in their Trust Deeds—especially at the time of 12AB registration / renewal, and in 80G approval cases.

WHY THIS CLAUSE MATTERS?

The department wants explicit assurance that:

• The trust cannot be revoked by the settlor/ trustees at will.
• The assets of the trust will continue to be used only for charitable purposes.
• On dissolution, the assets will be transferred to another registered charitable organisation, not distributed among trustees or members.

This ensures long-term protection of public charitable assets and prevents misuse.

WHAT THE IT DEPARTMENT IS CHECKING?

Trust deeds must clearly state that:

1.The trust is irrevocable.

2.No part of income or assets will benefit any trustee, settlor, or specified persons.

3.Upon winding up, assets will transfer to another 12AB-registered trust with similar objectives.

4.Activities will always remain charitable as defined under Sec. 2(15).

WHAT CHARITABLE TRUSTS SHOULD DO?

·      Review the Trust Deed.

·      If the irrevocability or dissolution clauses are missing or vague, amend the deed through the appropriate authority (Sub-Registrar/ Charity Commissioner).

·      Submit the amended deed during 12AB/80G application or when queried by the department.

WHY THE  IT DEPARTMENT IS PUSHING IT NOW?

With the stricter 12AB regime, the IT Department wants to ensure that trusts cannot dissolve themselves and divert assets—closing loopholes used for tax avoidance and private benefit.

R V SECKAR FCS,LLB 79047 19295