WHAT’S NEW IN THE REVISED FORM CRL-1?

 WHAT’S NEW IN THE REVISED FORM CRL-1

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CCI ORDERS PROBE INTO MARKET ABUSE CHARGES AGAINST ASIAN PAINTS

 CCI ORDERS PROBE INTO MARKET ABUSE CHARGES AGAINST ASIAN PAINTS

CCI on 1st July 2025 ordered an investigation against Asian Paints for allegedly abusing its dominant position in the market for manufacturing and sale of decorative paints.

The direction follows a complaint filed by Grasim Industries (Birla Paints Division), which allegedly accused Asian Paints of engaging in exclusionary practices aimed at stifling its entry and growth in the Indian decorative paints market.

The Commission is of the opinion that a prima facie case of contravention of the provisions of section 4(2)(a)(i), 4(2)(c) and 4(2)(d) of the Competition Act by the OP (Asian Paints) is made out in the present matter.

DEALER INTIMIDATION STRATEGIES:

Suspected tactics include threatening reduced discounts and credit, increased targets, and removal of dealer incentives like foreign trips—unless they commit to stocking only Asian Paints products.

INPUT FORECLOSURE:

It is alleged that Asian Paints dispirited third parties—property-owners, C&F agents, carriers, raw material suppliers—from carrying business with Birla Opus.

MARKET SHARE:

Asian Paints is having around52% market share, while Birla Opusis having around 7%

It is said that Birla Opusis is trying to increase its market share through belligerent pricing and distribution tactics.

RESULT OF CCI’s PROBING

The CCI’s probing may result in the outcome which could result in penalties or behavioral directives if anti-competitive conduct is confirmed against Asian Paints.

R V SECKAR FCS,LLB 79047 19295

COMPLIANCE FAILURES AT SIGACHI INDUSTRIAL UNIT

COMPLIANCE FAILURES AT SIGACHI INDUSTRIAL UNIT

Sigachi Industries Ltd. is an Indian listed company  manufacturing Microcrystalline Cellulose (MCC) and other pharmaceutical excipients.

Sigachi Industries witnessed a fatal explosion and fire at its Pashamylaram factory in Sangareddy district, Telangana, on June 30, 2025.

LOSS OF LIFE

Company reported  loss of life about 40 deaths and over 33 injuries due to fire accident.

NO OBJECTION CERTIFICATE (NOC)

The unit did not have a No Objection Certificate (NOC) from the department and lacked basic fire safety infrastructure.

RISK MANAGEMENT POLICY

There is  no  Risk Management Policy in place in the Company  as the workers had repeatedly informed the management about the risks of using outdated machinery, but their concerns were ignored.

NO AUTOMATIC SAFETY INTERLOCKS

Critical safety systems, such as automatic machine shutdowns upon overheating, were reportedly absent or non-functional.

• Poor maintenance and aging machinery

• Inadequate firefighting infrastructure

• No third‑party safety audits

This fatal tragedy highlights deep-rooted compliance failures, from ignored alarms to expired certificates, structural flaws, and oversight failures.

Hence , it is the duty  every listed company to strengthen its compliance strategy in order to ensure safety in the manufacturing plant.

R V SECKAR FCS,LLB

KARNATAKA BANK MD AND ED RESIGNS OVER AUDIT RED FLAGS FOR SPENDING WITHOUT BOARD’S APPROVAL

KARNATAKA BANK MD AND ED RESIGNS OVER AUDIT RED FLAGS FOR SPENDING WITHOUT BOARD’S APPROVAL

REASON FOR RESIGNATION

On Sunday, June 29, 2025, Karnataka Bank's Managing Director & CEO, Srikrishnan Hari Hara Sarma, and Executive Director, Sekhar Rao, resigned.

A small amount of Rs 1.16crores spent towards consultancy fee beyond the delegated powers of the MD and not ratified by the board is the cause for resignation.

The resignation letter says reason is " personal and decision to relocate to Mumbai"

MARKET REACTION

The bank's shares dropped by 7–8% after the resignations became public, settling around ₹192–₹194, as investor concerns over governance spooked the market.

TRIGGERING GOVERNANCE ISSUES

This as a serious governance lapse: the statutory auditors’ report—made public—accused  MD and ED of defying the board’s authority, which raises red flags about discipline and internal checks.

This underscores the importance of strict adherence to board oversight and internal controls.

 

R V SECKAR FCS,LLB 79047 19295

CAN AUDITOR BE APPOINTED BY A COMPANY PRIOR TO THEIR WRITTEN CONSENT AND ELIGIBILITY CERTIFICATE UNDER SECTION 141 COMPANIES ACT, 2013?

CAN AUDITOR BE APPOINTED BY A COMPANY PRIOR TO THEIR WRITTEN CONSENT AND ELIGIBILITY CERTIFICATE UNDER SECTION 141 COMPANIES ACT, 2013?

WHAT COMPANIES ACT 2013 SAYS ABOUT THE APPOINTMENT OF AUDITOR .

Section 139(1) of the Companies Act, 2013 and Rule 4(1) of the Companies (Audit and Auditors) Rules, 2014:

“The company shall obtain prior written consent from the auditor proposed to be appointed, and a certificate stating that they are eligible under Section 141, before the appointment is made.”

ARISIFRA SOLUTIONS LTD

ARISIFRA SOLUTIONS LTD has appointed an auditor (Price Waterhouse Chartered Accountants LLP) without first obtaining:

• ·      The auditor’s written consent, and
• ·      Eligibility certificate (as per Section 141)

Then ,the appointment is invalid, and it may attract penalties under:

Section 147: Penal provisions for contravention of Sections 139 to 146.

·      Company: Fine up to ₹5 lakhs.

·      Officer in default: Fine up to ₹1 lakh.

·      Auditor (if knowingly consents): May be disqualified and penalized.

REMEDIAL ACTION

• If the mistake has already occurred:

• ·      Immediately obtain the auditor’s consent and eligibility certificate.
• ·      Convene a Board Meeting again and ratify or re-appoint the auditor with proper documentation.

• ·      File Form ADT-1 (if applicable), only after valid appointment.

·      If already filed, consider compounding or rectification by reporting to ROC with a compounding application under Section 441.

The interim order dated july 25, 2024 provided that the contravention can be compounded on a payment of a compounding fee of ₹ 75,000 by the company and ₹ 25,000 each by the two of their promoters/ Directors :

FINAL THOUGHT

No auditor appointment is valid unless the company has received their written consent and eligibility certificate prior to the appointment.

R V SECKAR FCS,LLB 79047 19295

MAJOR CHANGES ANNOUNCED BY SEBI ON RPT RULES

 MAJOR CHANGES ANNOUNCED BY SEBI ON RPT RULES

Now ,Shareholders of Listed Companies will receive valuation reports for significant  RPT transactions, accessible via a web link and QR code.

 

SEBI has made significant updates to the rules around Related Party Transactions (RPTs) under LODR Regulations, with changes announced today, June 27, 2025

 

1.CEO/CFO CERTIFICATE NOW MANDATORY  FOR RPT

 

The audit committee must receive a certificate from the CEO (or whole-time director) and CFO, verifying that the terms of proposed RPTs are indeed in the best interest of the company.

 

Previously, promoters were also required to provide such certification; this requirement has now been removed.

 

DETAILED DISCLOSURES FROM SEPTEMBER 1,2025

 

From September 1, 2025, companies are required to furnish:

 

·      The new CEO/CFO certificate,

 

·      An external valuation or valuation report,

 

·      Detailed disclosures in a standardized format to both the audit committee and shareholders

 

INDUSTRY STANDARDS FRAMEWORK

 

• These disclosures must align with the Industry Standards developed by ASSOCHAM, CII, and FICCI, in consultation with SEBI.

 

• RPTs are categorized as Material, Limited, or Minimum, depending on thresholds (e.g., ₹1 crore, 2% of turnover/net worth), with corresponding disclosure levels

 

• Material RPTs require comprehensive disclosures; smaller residual RPTs only need limited or minimal info

BROADER MATERIALITY POLICY REQUIREMENTS

• The LODR Amendment 2025 further mandates that boards must approve materiality policies for RPTs, to be reviewed at least once every three years, with thresholds clearly defined .

 

• It also empowers audit committees to review subsidiary RPTs exceeding 10% of a subsidiary's turnover.

 

WHAT LISTED COMPANIES SHOULD DO?

 

·      Update internal RPT policies to include signature requirements from CEO/CFO.

 

·      Engage external valuers for RPTs above ₹1 crore.

 

·      Revise templates to match standardized disclosure formats.

 

·      Train audit committees and boards on the new thresholds, categories, and documentation needs.

 

·      Schedule a policy review once every 3 years, in line with LODR amendments.

 

RELAXATION IN ROYALTY PAYMENT DISCLOSURES:

 

 SEBI has eased the requirement for peer comparison in royalty payment-related disclosures, reducing compliance burden.

 

R V SECKAR FCS,LLB 79047 19295