₹7,380 CR ODI FRAUD FIR REGISTERED ON 5 CHARTERED ACCOUNTANTS

 ₹7,380 CR ODI FRAUD FIR REGISTERED ON 5 CHARTERED ACCOUNTANTS

 FIRS REGISTERED AGAINST 43 COMPANIES & 5 CAS IN MUMBAI FOR ALLEGED ILLEGAL OVERSEAS REMITTANCES OF ₹7,380 CR VIA FAKE/UNVERIFIED FORM 15CBS.

₹7,380 CRORE OVERSEAS REMITTANCE CASE:

 A SERIOUS DUE-DILIGENCE WARNING FOR PROFESSIONALS

Mumbai Police are investigating two FIRs involving 43 companies and 5 Chartered Accountants in alleged overseas remittances totalling approximately ₹7,380 crore during April 2021–March 2025.

According to reported allegations:

15CB CERTIFICATES ISSUED WITHOUT ADEQUATE VERIFICATION BY CAS

🔹 One FIR concerns ₹4,804.5 crore in overseas remittances allegedly facilitated through Form 15CB certificates issued without adequate verification of financial and transaction-related documents.

REMITTANCE TO OVERSEAS SHELL COMPANIES

🔹 A second FIR concerns ₹2,575.8 crore allegedly remitted to overseas shell companies, with investigators alleging that fake certificates were submitted to the Income-Tax Department.

The matter has reportedly been transferred to the Economic Offences Wing (EOW) for investigation.

KEY PROFESSIONAL LESSON

A certificate or professional sign-off is not merely a formality.

Where a professional certifies a transaction involving substantial cross-border funds, independent verification, documentary scrutiny, client due diligence and professional scepticism are critical.

CAN A PROFESSIONAL SAFELY SIGN A CERTIFICATE MERELY BECAUSE DOCUMENTS HAVE BEEN PLACED BEFORE THEM?

The answer should be NO.

Professional certification is not a mechanical exercise. Where a certificate is relied upon for substantial overseas remittances, the professional must exercise appropriate professional skepticism, independent verification and due diligence.

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

WHETHER ROC ACTION IS JUSTIFIABLE AS IT PENALISED A COMPANY FOR NOT FILING FORM-32 30 YEARS AGO (1995) THE COMPANIES ACT, 1956 NOW?

 WHETHER ROC ACTION IS JUSTIFIABLE AS IT PENALISED A COMPANY FOR NOT FILING FORM-32 30 YEARS AGO (1995) THE COMPANIES ACT, 1956 NOW?

ROC HARYANA VS YOGIJI DIGI PRIVATE LIMITED

WHETHER LIMITATION ACT IS APPLICABLE TO THIS CASE ?

The lapse was treated as a continuing default for nearly 30 years, and adjudication was carried out under Section 454 of the Companies Act, 2013.

FACTS OF THE CASE

ROC Haryana recently imposed penalties on Yogiji Digi Limited and its Managing Director for failing to file Form‑32 regarding director appointment/regularization dating back to 1993–1995 under the Companies Act, 1956.

A CONTINUING DEFAULT

The lapse was treated as a continuing default for nearly 30 years, and adjudication was carried out under Section 454 of the Companies Act, 2013.

NO FORM 32 IS FILED FOR ALMOST 30 YEARS

Appointment made in 1993, regularization in 1995, but Form‑32 never filed.

Default Duration: Continued until 30 June 2026 (over 30 years).

TAKE AWAY

 ROC Haryana’s action against Yogiji Digi Limited demonstrates that historic defaults under the Companies Act, 1956 remain enforceable today under the Companies Act, 2013. Companies must proactively review old records and ensure all statutory filings (Form‑32/DIR‑12, returns of allotment, etc.) are complete to avoid heavy penalties.

MY VIEWS

The law of limitation can be a strong defense in ROC Haryana v. Yogiji Digi Private Limited Case.

Can a statutory authority initiate proceedings after approximately 30 years without any statutory provision expressly permitting such extraordinary delay?

The Delhi High Court recently reiterated that criminal proceedings for Companies Act offences cannot ordinarily be kept alive indefinitely. According to me, this rationale applies to civil cases also.

In Surendra Singh v. Registrar of Companies (2025), the Delhi High Court examined a Companies Act prosecution and held that where the punishment attracts the applicable limitation period, the ROC must address Sections 468–473 CrPC, including the question of when the offence came to the ROC's knowledge and whether extension / condonation is legally available.

The Madras High Court in Dalmia Bharat Ltd. v. Ministry of Corporate Affairs recognized this distinction: after the 2020 amendments, several Companies Act contraventions became matters for penalty adjudication under Section 454 rather than criminal prosecution.

It is not technically correct to say that the Limitation Act, 1963 automatically bars every Section 454 adjudication merely because 30 years have elapsed. The stronger challenge to a Section 454 order is that the ROC has exercised its penal/quasi-judicial power after an unreasonable and extraordinary delay, without statutory authority for such delayed action, causing serious prejudice to the company and persons concerned.

And if the ROC is relying upon a 1995 Form 32 default, there is an additional and potentially decisive issue: whether the present statutory penalty regime can be applied to an alleged contravention arising under the Companies Act, 1956 three decades earlier.

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

ROC BENGALURU PENALIZED ALL SIX DIRECTORS OF AVK VALVES INDIA PRIVATE LIMITED ₹1,00,000 EACH (TOTAL ₹6 LAKH) FOR FAILURE TO MAINTAIN MBP‑1 AND DIR‑8 DISCLOSURES, EVEN THOUGH THE LAPSE WAS ATTRIBUTABLE TO ONE DIRECTOR.

 ROC BENGALURU PENALIZED ALL SIX DIRECTORS OF AVK VALVES INDIA PRIVATE LIMITED ₹1,00,000 EACH (TOTAL ₹6 LAKH) FOR FAILURE TO MAINTAIN MBP‑1 AND DIR‑8 DISCLOSURES, EVEN THOUGH THE LAPSE WAS ATTRIBUTABLE TO ONE DIRECTOR.

ROC BENGALURU VS AVK VALVES INDIA PRIVATE LIMITED

FACTS OF THE CASE

During an inquiry under Section 206(4), the Practicing Company Secretary who signed the company's MGT-8 for the year ended 31.03.2022 reported that the company had not made available Form MBP-1 (disclosure of director's interest) and DIR-8 (declaration of non-disqualification) for one of its directors, Mr. Soren Kjaer — records that every company is required to maintain under Section 184.

ROC FINDINGS

Even though only one director failed to file MBP‑1/DIR‑8, ROC held all directors responsible, since disclosures must be tabled and recorded in board minutes.

The order highlights that disclosure obligations under Section 184 of the Companies Act, 2013 are individual and non‑delegable, making every director personally liable.

LESSONS LEARNED

This case underscores that ROC enforces strict liability: even a single director’s lapse can expose the entire board. For private companies, this is a governance wake‑up call—directors cannot rely on collective responsibility or secretarial staff alone.

IS THE BENGALURU ROC IS CORRECT IN LEVYING FINE ON ALL THE DIRECTORS INSTEAD OF DIRECTOR WHO HAS NOT FILED MBP‑1/DIR‑8 IN ROC BENGALURU VS AVK VALVES INDIA PRIVATE LIMITED

In my view, there is a substantial legal ground to criticize the ROC Bengaluru order, particularly if the factual position was that only one director had failed to furnish MBP-1/DIR-8 and the other five directors had actually furnished them.

1. SECTION 184(4) IS EXPRESSLY DIRECTOR-SPECIFIC

Section 184(1) requires “every director” to disclose his own concern or interest. More importantly, Section 184(4) says:

“If a director … contravenes” the provision, “such director” shall be liable to penalty.

2. ABSENCE OF RECORDS is not necessarily proof that every director committed the contravention

“ROC CAN NEVER PENALIZE ALL DIRECTORS

ROC can penalize each director only if the evidence establishes an individual contravention attributable to that director.

I would not regard the ₹1 lakh × 6 approach as automatically legally correct merely because the company could not produce MBP-1/DIR-8. The decisive question is whether the ROC established, director by director, that each of the six directors actually contravened Section 184.

If the factual record really shows five directors had submitted MBP-1/DIR-8 and only one had not, then the imposition of ₹1 lakh on all six is open to serious challenge. The better legal formulation for an appeal would be “failure to establish individual contravention and incorrect application of Section 184(4)”, rather than merely arguing that the penalty is excessive.

I strongly recommend that Company should appeal to RD , South within 60 days against the order of order of ROC, Bengaluru 

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

SEPARATE FILINGS MANDATORY FOR FOREIGN FIRMS, SAYS MCA

 SEPARATE FILINGS MANDATORY FOR FOREIGN FIRMS, SAYS MCA

VARANIUM CLOUD LIMITED WAS FINED BY SEBI ₹33.08 CRORE, RECOVERY OF ₹62.51 CRORE OF DIVERTED IPO/RIGHTS ISSUE PROCEEDS AND DIRECTED PROMOTER TO DISGORGE ₹128.77 CRORE IN UNLAWFUL GAINS IN THE IPO.

 VARANIUM CLOUD LIMITED WAS FINED BY SEBI ₹33.08 CRORE, RECOVERY OF ₹62.51 CRORE OF DIVERTED IPO/RIGHTS ISSUE PROCEEDS AND DIRECTED PROMOTER TO DISGORGE ₹128.77 CRORE IN UNLAWFUL GAINS IN THE IPO.

KEY FINDINGS IN SEBI’S FINAL ORDER AGAINST VARANIUM CLOUD LIMITED

FUND DIVERSION:	₹18.98 crore from IPO proceeds and ₹43.53 crore from rights issue proceeds were diverted. Of this, ₹32.73 crore went directly to promoter Sabale.
UNLAWFUL GAINS:	Sabale and promoter group entity Varanium Networks Pvt Ltd sold shares during the price surge (₹131 → ₹1,526 in 3.5 months).
TOTAL GAINS:	₹128.77 crore (₹111.52 crore to Sabale, ₹17.25 crore to Varanium Networks).
FINANCIAL MISSTATEMENTS:	·       Fictitious sales/purchases recorded, often supported only by journal entries. ·       Misleading disclosures in prospectus, incorrect shareholding info, and false statements on IPO proceeds usage. ·       Related-party transactions with Varanium Earth Pvt Ltd (99.99% owned by Sabale) were found fictitious.
MISLEADING ANNOUNCEMENTS:	·       Proposed ₹2,683 crore acquisition of Fastway Transmissions Pvt Ltd (never executed) was used to mislead investors into funding a ₹1,250 crore preferential issue

PENALTIES & RESTRICTIONS

MONETARY PENALTIES:	₹33.08 crore imposed on VCL, Sabale, and seven associates.
DISGORGEMENT	₹128.77 crore unlawful gains to be returned with 12% interest.
RECOVERY:	₹62.51 crore diverted IPO/rights issue proceeds to be brought back with 12% interest.
MARKET BAN:	VCL and Sabale barred from securities market for 7 years.
DIRECTORSHIP BAN:	Sabale prohibited from holding director/managerial roles in listed companies or SEBI-registered intermediaries for 7 years.

 

IMPACT ON INVESTORS

Varanium Cloud’s stock trajectory:

·       ₹131 (Sept 2022 listing) → ₹1,526 (Jan 2023 peak) → ₹17.75 (May 2024 collapse).

DELISTED

·       Shares were compulsorily delisted in April 2026, leaving investors with illiquid holdings and heavy losses.

KEY TAKEAWAYS

SME PLATFORM RISKS:

Rapid price surges can mask weak governance.

DUE DILIGENCE FAILURES:

Intermediaries also penalized for inadequate verification.

INVESTOR TAKEAWAY:

Always scrutinize related-party transactions, IPO proceeds usage, and feasibility of large acquisition announcements.

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

 

ROC IMPOSED A FINE OF RS 50000 FOR TRANSFERING SHARES WITHOUT DEMAT FORM BY A PRIVATE LTD COMPANY

 ROC IMPOSED A FINE OF RS 50000 FOR TRANSFERING SHARES WITHOUT DEMAT FORM BY A PRIVATE LTD COMPANY

ROC BENGALURU VS FYLE TECHNOLGIES PRIVATE LTD

·     Under Rule 9B(4)(a), shareholders of a covered private company intending to transfer their securities after 30 June 2025 are required to dematerialize them before the transfer.

·     The company obtained its ISIN on 8 July 2025, but just 16 days later, on 24 July 2025, its Board approved a share transfer even though the transferor shareholders had not dematerialized their shares.

·     The ROC imposed ₹10,000 each on the company and four officers in default.

·     ROC directed the company to dematerialize the shares and submit proof through Form GNL-1 within 30 days.

·     For private companies covered by Rule 9B, dematerialization needs to be checked before approving a share transfer.

CAN NCLT ORDER SEARCHES AT OFFICES OF A CORPORATE ON THE BASIS OF A PETITION FILED BY A PETITIONER ?

 CAN NCLT ORDER SEARCHES AT OFFICES OF A CORPORATE ON THE BASIS OF A PETITION FILED BY A PETITIONER ?

NATIONAL COMPANY LAW TRIBUNAL CONDUCTS SEARCH AT MINING FIRM OFFICE IN JAGADHRI

FACTS

The National Company Law Tribunal (NCLT) has conducted a search at the office of a mining firm in Jagadhri, Haryana, following allegations of billing irregularities, illegal mining, and fraudulent transportation of mining material.

The action stems from a petition filed by Sanjeev Chaudhary of Panipat, and documents have been seized for further inquiry.

ALLEGATIONS UNDER INVESTIGATION

FRAUDULENT BILLING PRACTICES	Bills allegedly generated through improper means
EXCESSIVE REPORTING OF MINING OUTPUT	mining material shown as sold in excess of site capacity.
ILLEGAL MINING & TRANSPORTATION	suspicion of unauthorized extraction and movement of material.
NON-DISCLOSURE OF ACCOUNTS	— complainant claims he was denied access to accounts for the past 11 months, despite a written business agreement

POSSIBLE OUTCOMES:

·     If proven, the firm could face penalties under the Companies Act, 2013, including fines and potential prosecution.

·     The Tribunal may order forensic audits or appoint an interim administrator if governance lapses are severe.

·     Civil and criminal liability could extend to directors and officers if mens rea (intent) is established.

CONTEXTUAL NOTE

NCLT’S ROLE:

Primarily adjudicates matters of corporate law, insolvency, and shareholder disputes. Searches of this nature are unusual, suggesting the seriousness of allegations.

COMPARATIVE PRACTICE:

Similar to SEBI’s enforcement actions in securities markets, NCLT can order search and seizure when corporate fraud or mismanagement is suspected.

LEGAL PRECEDENT:

Courts have emphasized that mens rea (criminal intent) and limitation periods are critical in determining liability, as seen in Registrar of Companies vs. Ranjan Meghani (Calcutta HC) — where discharge was upheld due to lack of intent and time-bar issues.

PUNISHMENTS FOR FRAUDS, FALSE STATEMENTS & FALSE EVIDENCE

Section 447 – Punishment for Fraud	Definition: Fraud includes any act, omission, concealment of fact, or abuse of position committed with intent to deceive, gain undue advantage, or injure interests of the company, shareholders, or creditors. PENALTY: Imprisonment: Minimum 6 months, up to 10 years. FINE: At least equal to the amount involved in fraud, up to 3 times that amount. SPECIAL CASE: If fraud involves public interest, minimum imprisonment is 3 years.
Section 448 – Punishment for False Statements	Scope: Applies to false statements made in documents, returns, reports, certificates, or declarations required under the Act. Penalty: Same as Section 447 (since false statements are treated as fraud).
Section 449 – False Evidence	Giving false evidence during NCLT proceedings can lead to imprisonment up to 7 years and fines.

KEY TAKEAWAYS

·     NCLT primarily adjudicates matters of corporate law, insolvency, and shareholder disputes. Searches of this nature are unusual, suggesting the seriousness of allegations

·     Similar to SEBI’s enforcement actions in securities markets, NCLT can order search and seizure when corporate fraud or mismanagement is suspected.

# Your Knowledge partner R V Seckar 79047 19295,