WHY SEBI DROPPED INSIDER-TRADING CASE INVOLVING ADANI GREEN ENERGY LTD’S (AGEL) 2021 IN THE ACQUISITION OF SB ENERGY ?

 WHY SEBI DROPPED INSIDER-TRADING CASE INVOLVING ADANI GREEN ENERGY LTD’S (AGEL) 2021 IN THE ACQUISITION OF SB ENERGY ?

FACTS OF THE CASE

SEBI initially treated AGEL acquisition discussions, as early as late April and May 2021, as potentially price-sensitive.

AGEL’s proposed acquisition of SB Energy triggered SEBI scrutiny when relatives (Shah brothers) of a key person (Pranav Adani) traded in AGEL shares before the formal announcement.

ALLEGATION BY SEBI

The regulator alleged that acquisition-related information was Unpublished Price Sensitive Information (UPSI) from an early stage and was communicated to connected persons who traded on it.

SEBI’S FINAL ORDERS

However, SEBI’s final orders concluded that detailed reporting on that transaction appeared in the public domain by 16 May 2021 — before the relevant trades alleged to be insider trading — and that therefore the information was no longer “unpublished.”

LEAKED INFORMATION IS NOT AN UPSI

·      Exploratory negotiations do not automatically qualify as UPSI.

 • UPSI arises only when information reaches a reasonable level of certainty and crystallisation.

 • Detailed media reports can render information “generally available”, even before an official exchange disclosure.

 • Relationship or phone calls alone are insufficient to establish insider trading without proof of possession and use of UPSI.

WHEN INFORMATION IS “TRULY UNPUBLISHED” UNDER SEBI LAW:

·      It is not yet publicly disclosed via stock exchanges or media.

·      It relates to material events that would likely affect the company’s share price.

·      It remains confined to a limited group of insiders.

SEBI’S FINDINGS

✔ Price sensitivity alone does not make information UPSI.

✔ Information must be price-sensitive + unpublished.

✔ UPSI arises only when negotiations reach seriousness & specificity.

✔ Once credible information is in the public domain, it ceases to be UPSI.

FINAL VERDICT

Proceedings disposed of — No penalty, no disgorgement, no directions.

R  V SECKAR , FCS , LLB 79047 19295

 

WHETHER HAND DELIVERY OF FINANCIALS TO SHAREHOLDERS EVERY YEAR IS PERMISSIBLE AND WHETHER IT WILL BE CONSIDERED AS NOT SENDING THE FINANCIALS AS REQUIRED UNDER SEC 136?

 WHETHER  HAND DELIVERY OF FINANCIALS TO  SHAREHOLDERS EVERY YEAR IS PERMISSIBLE AND WHETHER  IT WILL BE CONSIDERED AS NOT SENDING THE FINANCIALS AS REQUIRED UNDER SEC 136?

ROC , MUMBAI VS OM SHYAMJI FOODS PRIVATE LIMITED

FACTS OF THE CASE

The Company did not serve the copies of Annual Reports for FY 2018-19 to its members. The Company vide its reply dated 31.03.2023 admitted that being a private company, the Annual report was sent to the members by hand delivery, in accordance with their oral understanding since incorporation.

This was never questioned by the members since incorporation. The Company has started the practice of sending the Annual Reports by Indian Post since FY 2020-21. Thus, the IO concluded that Company had failed to serve the Annual Reports for FY 2019-20 to its members, in contravention of provisions of section 136 of the Companies Act, 2013.

INTERESTING FACT 

The interesting thing is that neither the Company insisted nor the ROC himself considered the provisions of Sec 20(2) of CA2013 which allows hand delivery of documents to members.

ADMISSION BY THE COMPANY 

OM SHYAMJI FOODS admitted the default on behalf of the all the notices through a PCS  and submitted that the Company was a Small Company during the period of default.

ROC’S MUMBAI ORDER 

The Company does not fall under definition of Section 2(85) of the Act during the relevant period. It is observed that the Company failed to serve the Annual Reports for FY 2018-19 to its members, in contravention of provisions of section 136 of the Companies Act, 2013.

Thus, the Company shall be liable to a penalty of Rs. 25,000/-(Rupees Twenty-Five Thousands only) and its Officers in default shall be liable to a penalty of Rs.5,000/- (Rupees Five Thousands only)under the provisions of Section 136(1) for default of Section 136(3) of the Act.

INTERESTING FACTS OF THIS CASE

1.       The company claims that they were doing it since incorporation (2008) and the members never complained about it.

2.       Despite claiming that they sent financials through hand delivery, they accepted ROC's view that it is not considered compliance with Sec 136, despite the provisions of Sec 20 (2) and the fact that Sec 136 doesn't provide for any specified manner for sending of financials.

3.       This was purely a case of neither the ROC nor the company being aware of the applicable provisions.

4.       As per  Secretarial Standards (SS) of ICSI notice can be send by hand.

5.       In the enquiry company has accepted that it their fault in non deliver of financial results, this aspect goes against the company in the appeal. Instead during the hearing company should not have accepted that it is their mistake in deliver of documents then definitely company can go into the appeal.

CAN THE COMPANY APPEAL TO REGIONAL DIRECTOR , MUMBAI ?

1.But tactically the default should not have been admitted by the company through its PCS. It negates the opportunity to the company to fight and go in appeal.

2. Section 20 (2) allows hand delivery .SS of ICSI also allows notice can be send by hand. There is no complaint from shareholders An appeal can be made to RD stating that it failed to present these facts to ROC hence it is appealing now.

3. There is no dispute from shareholder about non receipt of financials. This is a proof it financials have been served properly.

4.To appeal against a decision for incorrect law interpretation, company can file an appeal to Regional Director ( RD,Mumbai)  similar to Special Leave Petition (SLP) under Article 136 of the for misinterpretation or procedural errors. The appeal process involves reviewing ROC’s records, highlighting legal errors, and seeking a higher forum (RD)  review to ensure justice and correct the law's application.

R V SECKAR, FCS, LLB 79047 192295

 

NOW DIN KYC IS TO BE DONE ONCE IN THREE YEARS AND NOT EACH YEAR – MCA UPDATE

 NOW  DIN KYC  IS TO BE DONE ONCE IN THREE YEARS AND NOT EACH YEAR – MCA UPDATE

KEY UPDATE ON DIN KYC FREQUENCY

Previously an annual requirement, DIN KYC filing is now required on or before the 30th of June of the immediately following "every third consecutive financial year". This means the filing obligation has changed from annual to once every three years.

WHO MUST FILE:

Every individual who holds a DIN as of March 31st of a financial year must comply with the KYC requirements, regardless of whether they are an active director or the DIN is in an "Approved" or "Disqualified" status.

FILING METHOD:

If a director needs to update any details (e.g., permanent address, nationality), they must file the comprehensive e-Form DIR-3 KYC.

If there are no changes to the pre-filled contact details (mobile number and email address), the director can use the simpler web-based Form DIR-3 KYC-Web.

UPDATING DETAILS WITHIN THE PERIOD:

For changes in mobile number, e-mail address, or residential address, the relevant form (usually DIR-3 KYC Web) must be submitted within 30 days of the change, along with prescribed fees.

PENALTIES:

Failure to file the required KYC form by the due date results in the DIN being marked as "Deactivated due to Non-filing of DIR-3 KYC". The DIN can be reactivated by filing the pending form and paying a late fee of ₹5,000.

 

R V SECKAR FCS, LLB 79047 19295

SML ISUZU LIMITED WAS PENALIZED FOR APPOINTMENT OF WHOLE TIME DIRECTOR WITHOUT CENTRAL GOVERNMENT APPROVAL UNDER SECTION 196 OF COMPANIES ACT ,2013

 SML ISUZU LIMITED WAS PENALIZED FOR APPOINTMENT OF WHOLE TIME DIRECTOR WITHOUT CENTRAL GOVERNMENT APPROVAL UNDER SECTION 196 OF COMPANIES ACT ,2013

SML ISUZU LIMITED Vs ROC, PUNJAB AND CHANDIGARH

FACTS OF THE CASE

In the case of SML Isuzu Limited, the company filed an application seeking Central Government approval under Section 196 read with sub-clause (e) of Part I of Schedule V for the re-appointment of a Whole-time Director Mr. Tadanao Yamamoto, a foreign national, as a Whole-time Director for a period from November 30, 2018, to November 29, 2020. (who was a foreign national) for a period of one year.

NO APPROVAL FOR HIS PRIOR APPOINTMENT

On examination of the application and the company's response to the queries, it was observed that no approval was sought for the previous appointment of the same individual as Whole-time Director.

THE REQUIREMENT:

Under Section 196(4) of the Companies Act, 2013, read with Schedule V, a company must obtain Central Government approval if the terms and conditions of a managerial appointment (including remuneration) are at variance with the conditions specified in Schedule V.

THE VARIANCE:

One of the conditions in Part I of Schedule V is that the appointee must be a "resident of India" (defined as staying in India for a continuous period of not less than twelve months immediately preceding the appointment date).

 Mr. Yamamoto was absent from India for 57 days during the relevant period, which meant the residency condition was not met and the appointment was in variance with Schedule V.

THE PENALTY:

Because SML Isuzu did not seek CG approval for this non-compliant reappointment, the ROC imposed penalties on the company (₹2,00,000) and the officers in default (₹50,000 each).

LESSONS LEARNED

Central Government approval is generally not required for the appointment of a Whole-time Director if the appointment and remuneration comply with all the conditions specified in Schedule V of the Companies Act, 2013. However, such approval becomes mandatory if the appointment or remuneration terms deviate from these specified conditions.

R V SECKAR,FCS,LLB 79047 19295

COMPANY SECRETARY MS SHITAL GURAV RESIGNING AS COMPLIANCE OFFICER FROM 282 BIOENERGY LTD CITING COMPLIANCE IRREGULARITIES AND GAPS

 COMPANY SECRETARY MS SHITAL GURAV RESIGNING AS COMPLIANCE OFFICER FROM 282 BIOENERGY LTD CITING COMPLIANCE IRREGULARITIES AND GAPS

A SERIOUS FOREWARNING ABOUT THE COMPLIANCE ISSUES IN A LISTED COMPANY

This resignation serves as a serious forewarning regarding potential governance and compliance weaknesses within a listed entity.

WHAT HAPPENED?

In this instance, the Company Secretary & Compliance Officer resigned with immediate effect, explicitly stating in her resignation letter that she had observed compliance irregularities and gaps which were raised through appropriate internal channels but remained unaddressed.

She further stated that, under the prevailing circumstances, she was unable to discharge her statutory duties in alignment with applicable laws, regulatory expectations, and professional standards.

DISCLOSURE UNDER REGULATION30 OF THE SEBI (LODR)

The resignation was formally disclosed by the Company under Regulation 30 of the SEBI (LODR) Regulations, 2015, clearly recording the stated reasons.

WHY THIS MATTERS?

·     The Compliance Officer is the first line of defence under SEBI LODR Regulations

·     A resignation citing compliance irregularities is not routine

·     It signals systemic lapses, not isolated errors

LESSONS LEARNED

For Boards and senior management, such disclosures should serve as a serious governance signal, not a routine compliance update.

For compliance professionals, it reinforces that upholding the law may sometimes require not continuing in such organisation.

R V SECKAR, FCS, LLB 79047 19295

 

THREE SEASONS WAS FINED BY ROC FOR NOT OBTAINING A DECLARATION FROM INDEPENDENT DIRECTORS UNDER SECTION 134 (3) OF COMPANIES ACT ,2013

 THREE SEASONS  WAS FINED BY ROC FOR

 NOT OBTAINING A DECLARATION FROM

 INDEPENDENT DIRECTORS UNDER

 SECTION 134 (3) OF COMPANIES ACT ,2013

THREE SEASONS  EXIM LIMITED VS ROC, VIJAYAWADA

FACTS OF THE CASE

Under Section 134(3) of India's Companies Act, 2013, the Board's Report attached to financial statements must include a statement confirming that independent directors have given a declaration as required by Section 149(7), affirming their independence and that they meet the criteria for independence.

PURPOSE OF THE DECLARATION

This declaration ensures independent directors are genuinely free from company influence, safeguarding minority shareholders, and is crucial for governance, being a mandatory disclosure in the annual report, with failure leading to penalties.

INDEPENDENT DIRECTORS' DECLARATION (SEC 149(7)):

Each Independent Director must confirm in writing to the Board that they meet the criteria for independence, are not disqualified, and have no other relationships that could interfere with their independent judgment.

This is a mandatory disclosure within the Board's Report, which is attached to the financial statements presented at the Annual General Meeting (AGM).

BOARD'S CONFIRMATION:

The Board's Report must explicitly state that such declarations have been received from all Independent Directors.

PENALTY FOR THE LAPSE

Roc ,Vijayawada imposed fine on Three Seasons Exim Rs`300,000 on the company and   `50,000 each on four directors in default for not obtaining a declaration from its independent directors to the board’s report for the financial year 2022-2023.

R V SECKAR, FCS, LLB 79047 19295

DISCLOSURE UNDER REGULATION 30 OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 BY UNISTAR MULTIMEDIA LTD ABOUT UNAUTHORISED ATTEMPT TO ACCESS MCA PORTAL

 DISCLOSURE UNDER REGULATION 30 OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 BY UNISTAR MULTIMEDIA LTD ABOUT UNAUTHORISED ATTEMPT TO ACCESS MCA PORTAL

WHAT HAPPENED ?

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Schedule III, Part A, Unistar Multimedia wish to inform the SE that the Company has identified an unauthorised attempt to access its account on the Ministry of Corporate Affairs (MCA) portal.

REACTION BY THE COMPANY

The said attempt was promptly detected, and the Company immediately activated necessary security measures, including securing login credentials and strengthening access controls.

The company further confirmed that no statutory filings were altered, no data was compromised, and there has been no material impact on the operations or financials of the Company.

REVIEW BY UNISTAR MULTIMEDIA

As a matter of abundant caution and good governance, the Company has reviewed and enhanced its internal controls relating to access and monitoring of statutory portals.

The Company will continue to monitor the situation and take all necessary steps to safeguard its systems and regulatory compliances.

WHY THIS DISCLOSURE?

Disclosure of data breach is to be made by listed companies mainly for the interest of transparency and in compliance with applicable regulatory requirements.

R V SECKAR ,FCS, LLB 79047 19295