THE COMPANY CONVERTED LOAN INTO EQUITY BY PASSING A RESOLUTION UNDER SECTION 62(1)(C) INSTEAD OF SECTION 62(3) AND ROC IMPOSED A PENALTY OF ₹2.50 LAKH ON THE COMPANY AND ITS DIRECTORS. ROC , NEW DELHI VS GAME CHANGERS TEXFAB LIMITED

 THE COMPANY CONVERTED LOAN INTO EQUITY BY PASSING A RESOLUTION UNDER SECTION 62(1)(C) INSTEAD OF SECTION 62(3) AND ROC IMPOSED A PENALTY OF ₹2.50 LAKH ON THE COMPANY AND ITS DIRECTORS.

ROC , NEW DELHI VS GAME CHANGERS TEXFAB LIMITED

FACTS OF THE CASE

Company converted its ‘‘Loan into Equity’’ by passing a Special Resolution (SR) erroneously u/s ''62(1)(c)'' instead of Section ''62(3)'' of the Companies Act 2013, resulting, ROC imposed a penalty of ₹2.50 lakh on the Company and its directors.

SECTION 62 OF THE COMPANIES ACT, 2013

Section 62(1)(c): Deals with issue of shares to persons other than existing shareholders, through preferential allotment, subject to compliance with Section 42 (private placement).

Section 62(3): Specifically covers conversion of loans or debentures into equity shares, provided this option was approved by a special resolution at the time of issuing the loan/debenture.

PASSING OF SPECIAL RESOLUTION

Company passed a SR on 01.07.2015 through its shareholders approving a loan amounting to ₹3,01,49,600 from its Holding Company and decided that if the Company fails to repay the loan, it will be converted into Equity.

FAILED TO FILE MGT-14

➡️Additionally, as per the provisions, Company is required to file MGT-14 for passing SR, as required u/s 117 r/w Section 180(1)(c) of the Companies Act, 2013, but the Company failed to do so

CONVERSION OF LOAN INTO EQUITY

Later, the Company decided to convert its loan into equity by passing SR on 15.12.2017 and converted its debt amount into 5,798 equity shares u/s 62(1)(c) of the Companies Act, 2013 instead of section 62 (3).

The Company accepted its mistake and stated that it occurred due to an “Inadvertent Oversight.” Further company submitted High Court judgment in

CTM INDIA LIMITED & ANR. VS ROC, DELHI & HARYANA,

CTM India Limited & Anr. vs ROC, Delhi & Haryana, wherein Court held that benefit of decriminalization of punishment should be extended in favour of the accused, which was accepted by the ROC.

REJECTION BY ROC

Additionally, company stated that default u/s 62(3) is not continuing in nature and is limited to mentioning of incorrect section in the resolution, therefore one-time penalty should be imposed. However, ROC rejected this contention.

CONCLUDING REMARKS

For loan-to-equity conversion: Always rely on Section 62(3).

Ensure the special resolution authorizing conversion was passed at the time of loan agreement and MGT-14 is filed within due date.

# YOUR COMPLIANCE PARTNER R V SECKAR, FCS, LLB 79047 19295,

COMPANY & CFO PENALISED FOR DEFECTIVE DIRECTORS’ RESPONSIBILITY STATEMENT & AS NON-COMPLIANCE. ROC, GOA Vs SHREEPATI BUILD INFRA INVESTMENT LIMITED

 COMPANY & CFO PENALISED FOR DEFECTIVE DIRECTORS’ RESPONSIBILITY STATEMENT & AS NON-COMPLIANCE.

ROC, GOA Vs SHREEPATI BUILD INFRA INVESTMENT LIMITED  

FACTS OF THE CASE

The Registrar of Companies (ROC), Goa, penalised Shreepati Build Infra Investment Limited with ₹3,00,000 and its CFO with ₹50,000 for filing a defective Directors’ Responsibility Statement and failing to comply with Accounting Standards AS‑09 and AS‑15 for FY 2021‑22. The order was passed on 13 May 2026 under Section 454 of the Companies Act, 2013.

KEY ISSUES

DEFECTIVE DIRECTORS’ RESPONSIBILITY STATEMENT (DRS): 

The statutory auditor had qualified the audit report citing deviations from AS‑09 (Revenue Recognition) and AS‑15 (Employee Benefits).

This automatically meant the DRS was defective, as directors are required to confirm compliance with accounting standards.

COMPANY’S DEFENCE: “DOUBLE JEOPARDY.”

Claimed deviations were disclosed in notes to accounts.

Argued that violations were already compounded under Section 129, so separate proceedings under Section 134 (5A) amounted to “double jeopardy.”

ROC’S RULING:

Held that violation of Section 134 (5A) is independent and distinct, relating specifically to directors’ responsibility for compliance.

Disclosure in notes or compounding under Section 129 does not absolve directors from responsibility under Section 134.

WHAT IS DOUBLE JEOPARDY?

Double jeopardy means that a person cannot be tried or punished twice for the same offence once they have already been acquitted or convicted. In India, this protection is enshrined in Article 20(2) of the Constitution and Section 300 of the Code of Criminal Procedure (CrPC).

ARTICLE 20(2), CONSTITUTION OF INDIA:

·      “No person shall be prosecuted and punished for the same offence more than once.”

·      Protects against double punishment for the same offence.

·      Applies only when there has been a conviction.

SECTION 300, CRPC (1973):

·      Extends protection to both convictions and acquittals.

·      Prevents retrial for the same offence or any other offence arising from the same facts.

·      Broader than Article 20(2).

SECTION 26, GENERAL CLAUSES ACT:

If an act constitutes an offence under two laws, prosecution may occur under either, but punishment cannot be imposed twice.

RISKS & TAKEAWAYS

INDEPENDENT LIABILITY:

Even if deviations are disclosed elsewhere, directors remain liable under Section 134.

AUDITOR QUALIFICATIONS MATTER:

Any qualification in audit reports can trigger automatic non‑compliance in the DRS.

PENALTIES:

₹3 lakh for the company and personal liability for officers (CFO) show MCA’s strict stance.

NO “DOUBLE JEOPARDY” DEFENCE:

 Different sections of the Act impose distinct obligations; compounding under one does not shield from another.

CONCLUDING REMARKS

Companies must ensure strict compliance with Accounting Standards before approving financial statements.

Directors should review audit qualifications carefully and address them proactively.

CFOs and compliance officers must verify disclosures in the Board’s Report and DRS to avoid penalties.

 

# YOUR COMPLIANCE PARTNER R V SECKAR, FCS, LLB 79047 19295,

FOR BREACHES OF DIRECTOR'S FIDUCIARY DUTIES UNDER SECTION 166, THE RD MUMBAI LEVIED RS. 74.70 LAKHS PENALTY ON DIRECTORS OF ZUARI AGRO CHEMICALS

 

FOR BREACHES OF  DIRECTOR'S FIDUCIARY DUTIES UNDER SECTION 166, THE RD MUMBAI LEVIED RS. 74.70 LAKHS  PENALTY ON DIRECTORS OF ZUARI AGRO CHEMICALS

RD,MUMBAI Vs ZUARI AGRO CHEMICALS LIMITED

RD,MUMBAI Vs ZUARI AGRO CHEMICALS LIMITED

FACTS OF THE CASE

The alleged violations involved are

·      acquisition of Mangalore Chemicals & Fertilizers Limited,

·      asset impairment in Zuari Farmhub Limited,

·      non-recovery from Zuari Global Limited,

·      a slump sale agreement with Zuari Farmhub Limited, and

·      a loan write-off to Adventz Trading DMCC.

The company reported no material financial or operational impact, with aggregate compounding fees of Rs. 74.70 lakhs levied solely on the directors and not on the listed entity.

CONTEXT OF SECTION 166

Section 166 of the Companies Act, 2013 outlines directors’ fiduciary duties, requiring them to:

·      Act in good faith in the best interests of the company, employees, shareholders, and community.

·      Avoid conflicts of interest.

·      Exercise due care, skill, and diligence.

·      Not achieve undue gain or advantage.

·      Breaches of these duties can result in penalties, fines, or disqualification.

EARLIER PENALTIES LEVIED ON ZUARI AGRO CHEMICALS

ACCOUNTING LAPSES:

Earlier in May 2026, Zuari Agro Chemicals faced a separate penalty of ₹66 lakhs for accounting and disclosure failures under Indian Accounting Standards.

SEBI SETTLEMENT:

In March 2026, SEBI imposed penalties and temporary market restrictions on Zuari Agro’s Managing Director and CFO for misstated financials and related-party transaction violations, with a settlement amount of ₹2.91 crore.

RISKS & IMPLICATIONS

Directors personally liable: The ₹74.70 lakhs penalty is borne by directors, not the company.

Reputation impact: Multiple regulatory actions in 2026 highlight governance lapses, which may affect investor confidence.

COMPLIANCE REMINDER:

Listed companies must ensure strict adherence to fiduciary duties and disclosure norms to avoid compounding penalties and SEBI actions.

 

# YOUR COMPLIANCE PARTNER R V SECKAR, FCS, LLB 79047 19295,

ASM TECHNOLOGIES RECEIVES RS. 25,40,000 FINE FROM BSE FOR WARRANT CONVERSION LISTING DELAY IN FY 2026

 ASM TECHNOLOGIES RECEIVES RS. 25,40,000 FINE FROM BSE FOR WARRANT CONVERSION LISTING DELAY IN FY 2026

FACTS

ASM Technologies Limited was fined Rs. 25,40,000/- (excluding GST) by BSE Limited during the financial year ended 31st March 2026 for delayed filing of a listing application for equity shares allotted upon conversion of warrants, in violation of Schedule XIX Para 2 of SEBI (ICDR) Regulations, 2018. The company's management described the lapse as technical and unintentional.

 

COMPANY:	ASM Technologies Limited
REGULATOR:	BSE Limited
FINE AMOUNT:	₹25,40,000 (excluding GST)
FINANCIAL YEAR:	FY26 (ending March 31, 2026)
VIOLATION:	Delay in filing listing application for equity shares allotted upon warrant conversion.
REGULATION BREACHED:	Schedule XIX Para 2 of SEBI (ICDR) Regulations, 2018.
TIMELINE REQUIREMENT:	Filing must be completed within 20 days of allotment; ASM exceeded this period.
MANAGEMENT RESPONSE:	Called the lapse technical and unintentional, with no willful disregard for compliance

IMPLICATIONS FOR ASM TECHNOLOGIES

FINANCIAL IMPACT:

While ₹25.4 lakh is not massive for a listed company, it signals regulatory scrutiny.

REPUTATION RISK:

 Even “technical lapses” can affect investor confidence, especially in compliance-heavy sectors.

OPERATIONAL LESSON:

Companies must strengthen internal compliance monitoring to avoid delays in filings.

RISKS & TAKEAWAYS

FOR INVESTORS:

This fine is not linked to fraud or financial misreporting, but rather a procedural delay. Still, repeated lapses could raise red flags.

FOR COMPANIES:

Regulators are increasingly strict on timelines; even minor delays can attract significant penalties.

FOR MARKET WATCHERS:

Such fines highlight SEBI’s push for transparency and timely compliance in capital markets.

CONCLUDING REMARKS

It is to be noted that no actions were taken against the ASM TECHNOLOGIES, listed entity, its promoters, directors, or subsidiaries either by SEBI or by any stock exchange during the review period, other than the BSE fine noted above.

The company was also found to be in compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, including Regulations 3(5) and 3(6).

# YOUR COMPLIANCE PARTNER R V SECKAR, FCS, LLB 79047 19295,

CENTRE OPERATIONALISES LABOUR CODES, PUBLISHES RULES-- WITH THE LATEST GAZETTE NOTIFICATION OF RULES, THE ENTIRE LABOUR CODE FRAMEWORK IS NOW FULLY FUNCTIONAL NATIONWIDE

 CENTRE OPERATIONALISES LABOUR CODES, PUBLISHES RULES-- WITH THE LATEST GAZETTE NOTIFICATION OF RULES, THE ENTIRE LABOUR CODE FRAMEWORK IS NOW FULLY FUNCTIONAL NATIONWIDE

FULLY OPERATIONALISED

The Centre has fully operationalized India’s new labour law framework by notifying the final rules for all four labour codes in the official gazette, completing a major labour reform process initiated over five years ago.

The four codes broaden worker protection, easing business operations and promoting a pro-worker labour ecosystem.

THE FOUR CODES:

The Code on Wages (2019), Industrial Relations Code (2020), Code on Social Security (2020), and Occupational Safety, Health and Working Conditions Code (2020), officially came into force on November 21, 2025.

GAZETTE NOTIFICATIONS

In over 30 gazette notifications issued on Friday (May 8, 2026) and Saturday (May 9, 2026), the Union government fully operationalized the four Labour Codes. Officials maintained that the rules had been published with “minor amendments” to the draft rules pre-published in December 2025.

MAJOR PROVISIONS:

·      Eight-hour workday and 48-hour weekly cap.

·      Mandatory weekly rest days; overtime pay for work on rest days.

·      Digital compliance: electronic registers, wage slips, claims, and notices.

·      Record-keeping: employers must preserve wage, overtime, and attendance records for 5 years.

·      National floor wage to be fixed by Centre in consultation with states.

·      Social security coverage extended to gig and platform workers, funded by aggregator contributions.

·      Equal wages for men and women

·      Maternity leave increased from 12 to 26 weeks

·      Work-from-home provisions for women

·      Annual free health check-ups for workers aged 40+

·      A National Reskilling Fund for unemployed workers needing retraining.

WHAT CHANGED FROM DRAFT RULES?

DROPPED MINIMUM WAGE FORMULA:

 The earlier calorie/clothing/housing-based formula (from the 1991 Supreme Court Reptakos Brett case) was removed. Minimum wage criteria will now be separately specified by the Centre. Experts warn this could lead to lower wages and greater disparities across states.

MODEL STANDING ORDERS 2026:

 Applicable to mining, manufacturing, and services sectors; require detailed worker records including mobile number, email, and ESI number.

IMPACT ON STAKEHOLDERS

EMPLOYEES:

·      Payslips may show reduced take-home pay due to restructured wage definitions.

·      Gig workers gain statutory social security rights for the first time.

EMPLOYERS (ESPECIALLY MSMES & IT FIRMS):

·      Payroll structures must be reworked.

·      Compliance burden shifts to digital record-keeping.

·      Thresholds (100–300 workers) for certain provisions may affect hiring flexibility.

STATES ROLE

·      Central rules apply mainly to sectors under Union jurisdiction (telecom, banking, insurance, mines, ports, aviation, PSU contractors).

·      States must notify their own rules to complete implementation.

CONCLUDING THOUGHTS

India’s labour law overhaul is now legally in force, but its real-world impact will depend on how states implement their rules and how employers adapt payroll and compliance systems. For workers, especially in the unorganised and gig economy, this reform promises broader protections—though wage fairness remains a contested issue.

# YOUR COMPLIANCE PARTNER R V SECKAR, FCS, LLB 79047 19295,

SEBI PROPOSES BUY-BACK RULE CHANGES TO EASE COMPLIANCE BURDEN ON LISTED COMPANIES

 SEBI PROPOSES BUY-BACK RULE CHANGES TO EASE COMPLIANCE BURDEN ON LISTED COMPANIES

A MAJOR OVERHAUL

SEBI has proposed a major overhaul of buyback rules for listed companies, reintroducing open market buybacks via stock exchanges, reducing compliance burdens like mandatory merchant banker appointments, and tightening safeguards around promoter participation and public shareholding. The consultation paper is open for public comments until May 29, 2026.

KEY PROPOSED CHANGES THROUGH STOCK EXCHANGES

RETURN OF OPEN MARKET BUYBACKS

Open market buybacks through stock exchanges, discontinued in April 2025, are set to be reintroduced.

This move aligns with recent tax changes that treat buyback proceeds as capital gains, eliminating earlier arbitrage.

SHORTER BUYBACK TIMELINE

 

Maximum duration capped at 66 working days (instead of six months).

Companies must deploy at least 40% of earmarked funds in the first half of the buyback period.

REDUCED COMPLIANCE BURDEN

Appointment of a merchant banker becomes optional, lowering costs for companies.

ENHANCED SHAREHOLDER COMMUNICATION

Companies must electronically notify shareholders within one working day of a buyback announcement.

PROMOTER & PUBLIC SHAREHOLDING SAFEGUARDS

Promoter holdings will be frozen at the ISIN level during buybacks (with limited exemptions).

Buybacks explicitly linked to minimum public shareholding (MPS) norms to prevent breaches.

REGULATORY CONSISTENCY

Gap between two buybacks aligned with the Companies Act, 2013, replacing the current one-year restriction within one year ('twelve months') that is from the date of closure of the preceding buyback offer.

TRADING MECHANISM:

The requirement for a separate trading window is scrapped; buy-backs can happen through the regular market channels.

 

SHIFT IN RESPONSIBILITY:

Procedural duties will move from merchant bankers to companies, stock exchanges, and secretarial auditors.

COMPARISON: OLD VS PROPOSED FRAMEWORK

Aspect	Old Rules (till 2025)	Proposed 2026 Changes
Open Market Buybacks	Discontinued (Apr 2025)	Reintroduced via stock exchanges
Timeline	Up to 6 months	Max 66 working days
Utilisation Requirement	40% in first half	Retained
Merchant Banker Requirement	Mandatory	Optional
Shareholder Notification	No strict timeline	Within 1 working day
Promoter Participation	Limited safeguards	Frozen holdings, stricter norms
Gap Between Buybacks	1 year	Aligned with Companies Act

 

RISKS & TRADE-OFFS

• Shorter timeline may pressure companies to act quickly, potentially reducing flexibility.
• Optional merchant banker role lowers costs but could reduce professional oversight.
• Promoter restrictions may limit flexibility for controlling shareholders.
• Tax parity removes arbitrage but could reduce attractiveness of buybacks compared to dividends

PRACTICAL IMPACT ON LISTED COMPANIES

If implemented, the proposals may:

·       Reduce compliance costs,

·       Provide faster capital restructuring options,

·       Improve flexibility in treasury management,

·       Simplify execution procedures,

·       While simultaneously tightening governance oversight around promoter actions and shareholder protection.

# YOUR COMPLIANCE PARTNER R V SECKAR, FCS, LLB 79047 19295,