WHAT IF CHANDRA SEKARAN'S APPOINTMENT AS CHAIRMAN OF TATA GROUP BY TATA BOARD IS NOT APPROVED BY THE MEMBERS IN THE COMING AGM AS NOEL TATA IS OPPOSING HIS APPOINTMENT?

 WHAT IF CHANDRA SEKARAN'S APPOINTMENT AS CHAIRMAN OF TATA GROUP BY TATA BOARD IS NOT APPROVED BY THE MEMBERS IN THE COMING AGM AS NOEL TATA IS OPPOSING HIS APPOINTMENT?

LEGAL & GOVERNANCE CONSEQUENCES

VACANCY IN CHAIRMANSHIP:

Mr. Chandrasekaran’s current term runs until February 2027, but reappointment at the AGM is essential for continuity.

If members reject his appointment, the board must immediately elect a new chairperson from among its directors.

DOMINANT ROLE TATA TRUST

Tata Trusts (holding ~66% of Tata Sons) have decisive voting power.

Noel Tata, as a trustee and family representative, opposing Chandra Sekaran could sway the outcome if the Trusts vote as a bloc.

QUORUM & PROCEDURAL RISKS:

Quorum clauses in Tata Sons’ Articles of Association require the joint nominee of Sir Dorabji Tata Trust and Sir Ratan Tata Trust.

If quorum itself fails, the AGM may stall, leaving Chandrasekaran’s reappointment unresolved.

SHARE MARKET TURBULANCE

If Mr. Chandrasekaran’s reappointment is not approved in the coming AGM, Tata Group companies—especially TCS, Tata Motors, and Tata Steel—could see volatility similar to the turbulence during Cyrus Mistry’s ouster in 2016.

TATA GROUP’S STRATEGIC PROJECTS AT RISK:

Chandrasekaran has been central to initiatives like Tata Digital, Air India’s turnaround, and semiconductor ventures.

His exit could slow or derail these projects until a new chairman sets direction.

POSSIBLE SCENARIOS

NOEL TATA AS SUCCESSOR

If Noel Tata is positioning himself against Chandrasekaran, he could emerge as a consensus candidate backed by Tata Trusts.

This would mark a return to family-led leadership after a decade of professional chairmanship.

INTERIM CHAIRMAN:

The board may appoint an interim chairman (possibly from independent directors) until a permanent successor is chosen.

LEGAL CHALLENGE:

Chandrasekaran could contest the rejection if procedural irregularities (like quorum failure) are involved.

OPPRESSION & MISMANAGEMENT

If Tata Sons’ members reject N. Chandrasekaran’s reappointment, courts could intervene if procedural irregularities or oppression claims arise. Indian precedents show that shareholder rejection of directors is valid if due process is followed, but tribunals and courts have stepped in when removals were oppressive, lacked probity, or violated Articles of Association.

KEY TAKEAWAYS

If Noel Tata successfully blocks Chandrasekaran’s reappointment, Tata Sons faces a leadership crisis, potential legal battles, and market turbulence. The Trusts’ dominance means succession will likely be resolved internally, but the choice between professional management and family leadership will define the group’s next decade.

# Your Compliance expert R V SECKAR, FCS, LLB 79047 19295,

SEBI IMPOSED A PENALTY OF ₹18 lakh ON LYPSA GEMS & JEWELLERY LTD FOR NOT ATTACHING A CERTIFICATE FROM PCS THAT NONE OF DIRECTORS ARE DEBARRED OR DISQUALIFIED IN ITS ANNUAL REPORT

 SEBI IMPOSED A PENALTY OF  ₹18 lakh ON LYPSA GEMS & JEWELLERY LTD FOR NOT ATTACHING A CERTIFICATE FROM PCS THAT NONE OF DIRECTORS ARE DEBARRED OR DISQUALIFIED IN ITS ANNUAL REPORT

SEBI VS LYPSA GEMS & JEWELLERY LTD

FACTS OF THE CASE

 SEBI IMPOSED A PENALTY OF  ₹18 lakh ON LYPSA GEMS & JEWELLERY LTD FOR FAILURE TO  attach in the  Annual Report of a listed entity  certificate from a Practicing Company Secretary confirming that none of the directors have been debarred or disqualified from being appointed or continuing as directors attacks penalty.

WHAT IS THE VIOLATION?

Under Regulation 34(3) read with Schedule V, Part C, Clause 10(i) of the SEBI LODR Regulations, the Annual Report of a listed entity is required to contain a certificate from a Practicing Company Secretary confirming that none of the directors have been debarred or disqualified from being appointed or continuing as directors.

LEGAL BASIS

Regulation 34(3) read with Schedule V of SEBI (LODR) Regulations, 2015: Requires disclosure of PCS certificate in Annual Report.

Section 118(11) of Companies Act, 2013: Non-compliance with Secretarial Standards attracts penalties.

IMPLICATIONS FOR LISTED COMPANIES

MANDATORY PCS CERTIFICATE:

Every listed entity must attach the certificate in its Annual Report; omission attracts SEBI adjudication.

DUAL LIABILITY:

 Non-compliance can trigger penalties under both SEBI LODR and Companies Act, 2013.

GOVERNANCE RISK:

Even small lapses (like missing certificates) are treated as systemic weaknesses.

INVESTOR CONFIDENCE:

Repeated disclosure failures damage credibility and ESG scores.

IMPORTANT COMPLAINT CHECK LISTS FOR LISTED COMPANIES

·       Ensure PCS certification on directors’ eligibility is attached annually.

·       Disclose cash flow & consolidated financials without exception.

·       Include auditor’s reports and AOC-1 statements in every filing.

 

# Your Compliance expert R V SECKAR, FCS, LLB 79047 19295,

WHAT IS THE DOCTRINE OF IN PARI DELICTO?

 WHAT IS THE DOCTRINE OF IN PARI DELICTO?

COURTS CANNOT LEND THEIR ASSISTANCE TO AN ILLEGAL OR UNACCOUNTED TRANSACTION; THE LOSS MUST LIE WHERE IT FALLS.

You Cannot Recover Money through Court When the Payment Itself Was for an Illegal Purpose

Poosa Sri Krishna & Ors. v. Gattu Kishan Rao & Anr., 2026 INSC 974, decided on 31 August 2026, the Supreme Court held that where the plaint itself reveals that the money was paid for an illegal and fraudulent purpose, the suit cannot be permitted to proceed. The plaint was accordingly rejected

The underlying arrangement involved payments allegedly made for procuring bank loans, including amounts intended to satisfy bank officials in their personal capacity. The plaint also referred to the procurement and exchange of demonetized currency.

The Court held that law, opposed to public policy and fraudulent, rendering the agreement void under Section 23 of the Indian Contract Act, 1872, forbade the object of the arrangement.

Court then applied the doctrine of in pari delicto—where parties are equally at fault in an illegal transaction, the Court will not come to the rescue of either party

The Supreme Court also reaffirmed the principle laid down in G. Pankajakshi Amma v. Mathai Mathew, (2004) 12 SCC 83: courts cannot lend their assistance to an illegal or unaccounted transaction; the loss must lie where it falls.

# Your Compliance expert R V SECKAR, FCS, LLB 79047 19295,

TRANSPARENCY ISSUES IN BOARD EVALUATION PRACTICES IN COFORGE LIMITED

 TRANSPARENCY ISSUES IN BOARD EVALUATION PRACTICES IN COFORGE LIMITED

Coforge’s internal audit flagged serious governance lapses: former Chairman O.P. Bhatt received the lowest rating in the board evaluation, but this was withheld from the Nomination & Remuneration Committee (NRC) and the board.

The controversy led to Bhatt’s resignation on September 8, 2026, and has raised questions about transparency in board evaluation practices.

AUDIT FINDINGS (KPMG, Q2 FY26):

·       Detailed board evaluation reports were not circulated to all directors.

·       The lowest rating for the Chairman was omitted from discussions.

NO IMPACT ON FINANCIAL REPORTING

Coforge emphasized that the issue relates to governance evaluation, not financial reporting.

No impact on financial statements, revenue, or profitability.

GOVERNANCE TRANSPARENCY ISSUES 

The audit flagged non-disclosure of a low rating for the Chairman, leading to Bhatt’s resignation. While Coforge insists this has no financial impact, the episode highlights serious governance transparency issues that could draw regulatory and investor scrutiny.

# Your Compliance expert R V SECKAR, FCS, LLB 79047 19295,

₹890.52 CR TAX + EQUAL PENALTY UNDER SECTION 74 CGST ACT ON TATA STEELS LTD WAS STRUCK DOWN BY SUPREME COURT

 ₹890.52 CR TAX + EQUAL PENALTY UNDER

 SECTION 74 CGST ACT ON TATA STEELS

 LTD WAS STRUCK DOWN BY SUPREME

 COURT

                TATA STEEL LTD. V. UNION OF INDIA

Tata Steel faced ₹890.52 Cr tax + equal penalty under Section 74 CGST Act.

The Supreme Court in Tata Steel Ltd. v. Union of India (2026) held that a Show Cause Notice (SCN) under Section 74 of the CGST Act cannot merely use labels like “fraud” or “suppression” without laying out the foundational facts.

The ₹890.52 crore tax demand plus equal penalty was struck down because the SCN was based only on audit objections, not on the independent satisfaction of the assessing officer.

The Supreme Court has made it clear—Section 74 is not a routine extension tool. Authorities must prove fraud or suppression with facts in the SCN itself. For corporates, this ruling is a strong defense against vague, audit-driven GST demands.

# Your Compliance expert R V SECKAR, FCS, LLB 79047 19295,

WHETER TATA GROUP WILL BE ACQUIRED BY INDIAN BUSINESS CONGLOMERATES IF IT GO FOR A MANDATORY PUBLIC LISTING AS DIRECTED BY RBI?

 WHETER TATA GROUP WILL BE ACQUIRED BY INDIAN BUSINESS CONGLOMERATES IF IT GO FOR A MANDATORY PUBLIC LISTING AS DIRECTED BY RBI?

MANDATORY PUBLIC LISTING

The Reserve Bank of India (RBI) has rejected Tata Sons’ bid to remain private, forcing the ₹2.01 lakh crore holding company of the Tata Group to go for a mandatory public listing.

RIVAL CONGLOMERATES MAY ACQUIRE A STAKE IN TATA GROUP

This marks a historic regulatory intervention that could reshape ownership dynamics and even open the door for rival conglomerates to acquire a stake in TATA Group.

MANDATORY LISTING FOR UPPER LAYER NBFC

Tata Sons remains classified as an Upper Layer NBFC, which requires public listing under RBI’s scale-based framework. Its assets of ₹2.01 lakh crore (as of March 2026) are well above the ₹1 lakh crore threshold.

LEADERSHIP TURBULENCE:

Chairman N. Chandrasekaran announced that he will not seek reappointment after Feb 2027, intensifying uncertainty. Noel Tata has opposed listing, while Shapoorji Pallonji (SP) Group supports it to dilute stake and reduce  debt.

ACQUISITION POSSIBILITY

A public listing makes Tata Sons’ shares tradable, potentially allowing large Indian conglomerates (Reliance, Adani, Birla, etc.) to acquire stakes.

VETO POWER

·       Tata Trusts’ majority holding gives them veto power.

·       Any hostile takeover attempt would face legal, cultural, and political resistance, given Tata’s national importance.

RISKS & CHALLENGES

GOVERNANCE CRISIS:

Listing amid leadership transition could weaken Tata Trusts’ grip.

MARKET VOLATILITY:

IPO of such scale may disrupt Indian equity markets temporarily.

REGULATORY OVERSIGHT:

As an NBFC-UL, Tata Sons will face stricter compliance for at least five years.

CONGLOMERATE	FINANCIAL CAPACITY	STRATEGIC FIT WITH TATA SONS	CHALLENGES
Reliance Industries (Mukesh Ambani)	Market cap ~₹19 lakh crore; strong cash flows from Jio & retail	Synergies in telecom, retail, energy; global ambitions align with Tata’s footprint	Cultural clash with Tata’s conservative governance; regulatory scrutiny
Adani Group (Gautam Adani)	Market cap ~₹12 lakh crore; aggressive expansion in infra, energy	Could leverage Tata’s brand credibility to balance reputation; infra + power synergies	Debt-heavy balance sheet; political sensitivities; Tata Trusts resistance
Aditya Birla Group	Market cap ~₹3.5 lakh crore; diversified across cement, metals, telecom	Long-standing peer of Tata; natural overlap in metals, financial services	Smaller scale vs Reliance/Adani; may need consortium approach
Mahindra Group	Market cap ~₹2 lakh crore; strong in autos, IT, agri	Cultural alignment with Tata values; IT + auto synergies	Limited financial muscle for hostile stake; would need alliances
Global Investors (Temasek, GIC, sovereign funds)	Deep pockets; long-term institutional investors	Could enter via SP Group stake; neutral governance stance	Lack of Indian industrial base; may face nationalist pushback

KEY TAKEOVER

RBI’s move forces Tata Sons into the public market, ending decades of private control. While Tata Trusts will fight to retain dominance, the Shapoorji Pallonji [SP] Group’s openness to dilution means rival conglomerates could finally gain a foothold in India’s most iconic business empire.

## Your Compliance expert R V SECKAR, FCS, LLB 79047 19295

RBI'S NEW FOREIGN EXCHANGE MANAGEMENT (EXPORT AND IMPORT OF GOODS AND SERVICES) REGULATIONS, 2026 COME INTO FORCE FROM OCTOBER 1, 2026, — REPLACING THE 2015 FRAMEWORK

 RBI'S NEW FOREIGN EXCHANGE MANAGEMENT (EXPORT AND IMPORT OF GOODS AND SERVICES) REGULATIONS, 2026 COME INTO FORCE FROM OCTOBER 1, 2026, — REPLACING THE 2015 FRAMEWORK

 

1)      Export realization period extends from 9 months to 15 months

 

2)       SOFTEX filing is being phased out.

 

3)      Every pending EDPMS entry needs to be reconciled before October 1.

 

4)      Exporters must file an Export Declaration Form (EDF) at the time of export

 

5)      For EDI ports, EDF submission is deemed part of the shipping bill.

 

Exporters and importers should update compliance processes before October 1, 2026, train staff on new EDF timelines, and coordinate with Authorized Dealers for smooth transition.

# Your Compliance expert R V SECKAR, FCS, LLB 79047 19295,