SEBI SUMMONED ANAND DAS, COMPANY SECRETARY OF INDUSIND BANK, IN MAY 2026 FOR SEBI PIT VIOLATION, MISSING SDD ENTRIES, UPSI RECORD TAMPERING -HEAVY PENALTY LIKELY TO BE IMPOSED

 SEBI SUMMONED ANAND DAS, COMPANY SECRETARY OF INDUSIND BANK, IN MAY 2026 FOR SEBI PIT VIOLATION, MISSING SDD ENTRIES, UPSI RECORD TAMPERING -HEAVY PENALTY LIKELY TO BE IMPOSED

BACKGROUND

ANAND DAS, COMPANY SECRETARY OF INDUSIND BANK,has recently been summoned and investigated by SEBI for alleged violations under the Prohibition of Insider Trading (PIT) Regulations, including missing entries in the Structured Digital Database (SDD), tampering of unpublished price-sensitive information (UPSI) records, and facing heavy penalties.

 This highlights SEBI’s increasing crackdown on compliance failures in corporate governance.

REASONS FOR SEBI’S ACTION

MISSING SDD ENTRIES

Under Regulation 3(5) & 3(6) of PIT Regulations, companies must maintain a Structured Digital Database (SDD) capturing all UPSI events with date, time, and audit trails.

Failure to record even a single UPSI event is treated as a serious compliance lapse.

UPSI RECORD TAMPERING

SEBI requires the database to be non-tamperable and preserved for at least 8 years.

Any manipulation or deletion of UPSI records is considered evidence of misconduct.

HEAVY PENALTIES

SEBI can impose monetary fines, market bans, and even criminal prosecution under Section 15G of the SEBI Act.

 

In past cases, senior officials have been barred from the securities market for insider trading violations.

INDUSIND BANK CASE

SEBI summoned Anand Das, Company Secretary of IndusInd Bank, in May 2026.

Allegations: A zonal head traded shares of client companies while in possession of UPSI.

SEBI investigated how the secretarial and compliance departments handled whistleblower complaints and UPSI records.

COMPLIANCE REQUIREMENTS FOR COMPANY SECRETARIES

·       Maintain SDD with strict access controls.

·       Capture all UPSI events (nature, date, time).

·       Ensure audit trails are intact and tamper-proof.

·       Certify quarterly compliance to SEBI.

RISKS & PENALTIES

VIOLATION	POSSIBLE SEBI ACTION
MISSING SDD ENTRIES	Monetary penalty, compliance warning
UPSI TAMPERING	Criminal liability, market ban
INSIDER TRADING	Prosecution, imprisonment, fines
NON-COOPERATION IN PROBE	Suspension of company secretary license

ACTIONABLE TAKEAWAYS

FOR COMPANIES:

·       Conduct regular internal audits of SDD.

·       Train compliance staff on PIT regulations.

·       Implement whistleblower mechanisms to detect violations early.

FOR COMPANY SECRETARIES:

·       Ensure personal accountability in certifying compliance.

·       Avoid shortcuts in UPSI documentation.

·       Cooperate fully with SEBI investigations to mitigate penalties.

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

THE ENFORCEMENT DIRECTORATE (ED) RAIDED VEDANTA LIMITED FOR THE BRAND FEE REFUND VIOLATION UNDER FEMA AS IT AMOUNT TO PROFIT SHIFTING AS BRAND FEES AND DIVIDENDS FROM VEDANTA INDIA COULD COVER $800 MILLION–$1 BILLION OF THE PARENT’S DEBT BETWEEN FY26–FY29.

 THE ENFORCEMENT DIRECTORATE (ED) RAIDED VEDANTA LIMITED FOR THE BRAND FEE REFUND VIOLATION UNDER FEMA AS IT AMOUNT TO PROFIT SHIFTING AS BRAND FEES AND DIVIDENDS FROM VEDANTA INDIA COULD COVER $800 MILLION–$1 BILLION OF THE PARENT’S DEBT BETWEEN FY26–FY29.

FACTS OF TRE CASE

The Enforcement Directorate (ED) recently raided four offices of Vedanta Limited in Delhi, Mumbai, and Udaipur over alleged violations of the Foreign Exchange Management Act (FEMA), focusing on brand fee and royalty payments to its UK-based parent company, Vedanta Resources. The probe includes scrutiny of a 2023 brand fee refund transaction and whether such payments amount to profit shifting. Alleged FEMA violations linked to brand fee and royalty payments made by Vedanta Ltd. to Vedanta Resources (UK).

WHAT IS BRAND FEE REFUND VIOLATIONS UNDER FEMA ?

A brand fee paid by an Indian entity to an overseas holding company is typically classified as Royalty for the use of intellectual property (IP), trademarks, or brand names. Such remittances can be made through the automatic route without prior ⁠Reserve Bank of India clearance, provided the payment is at arm's length and complies with ⁠Foreign Exchange Management Act (FEMA) regulations.

WHY "PROFIT SHIFTING" IS BEING DEBATED ?

In transfer-pricing and foreign-exchange compliance discussions, regulators often examine whether:

Excessive brand fees, royalties, or management fees were paid to an overseas parent company.

Such payments reduced taxable profits in India.

Funds were effectively transferred abroad without adequate commercial justification.

If a regulator concludes that a royalty or brand fee was significantly higher than an arm's-length amount, it may view the arrangement as a form of profit shifting. However, as of now, the ED has not publicly established that Vedanta engaged in illegal profit shifting; the matter remains under investigation.

FINANCIAL CONTEXT

Vedanta Resources (UK parent) holds ₹53,400 crore debt and relies heavily on dividends and royalties from Vedanta India for servicing this debt.

Rating agencies estimate that brand fees and dividends from Vedanta India could cover $800 million–$1 billion of the parent’s debt between FY26–FY29.

Regulators suspect excessive royalty payments may amount to profit shifting and potential tax evasion.

MARKET IMPACT

Vedanta’s shares fell over 4% to ₹313.50 following news of the raids.

The company is also in the middle of a major demerger, planning to split into four listed entities:

RISKS & IMPLICATIONS

REGULATORY RISK:

If ED finds violations, Vedanta could face financial penalties or restrictions on overseas remittances.

INVESTOR SENTIMENT:

Stock volatility may continue until clarity emerges.

CORPORATE GOVERNANCE:

The case highlights scrutiny of intra-group financial arrangements and cross-border brand fee structures.

CONCLUDING REMARKS

The ED raids on Vedanta Limited are part of a FEMA probe into brand fee and royalty transactions with its UK parent. While no penalties have been imposed yet, the investigation raises concern about profit shifting and compliance with foreign exchange rules. Investors should watch for regulatory updates and the impact on Vedanta’s ongoing demerger.

However, it would be premature to state as a confirmed fact that Vedanta committed profit shifting or violated FEMA until the investigation reaches a formal conclusion.

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

MCA PROPOSES MANY NEW AMENDMENTS TO THE COMPANIES ACT 2013, PUNISHING COMPANIES THAT FAILED TO SPEND 2% CSR AND “FIT AND PROPER” CRITERIA FOR DEBARRING DIRECTORS FROM HOLDING BOARD POSITION.

 MCA PROPOSES MANY NEW AMENDMENTS TO THE COMPANIES ACT 2013, PUNISHING COMPANIES THAT FAILED TO SPEND 2% CSR AND “FIT AND PROPER” CRITERIA FOR DEBARRING DIRECTORS FROM HOLDING BOARD POSITION.

BAN ON HOLDING BOARD POSITIONS

The move is a fallout of the IL&FS scandal, where the government was forced to supersede the board and take control but realised that it can do little to bar the disqualified directors, including some top names of the corporate sector, from holding board positions as the new Companies Act did not provide for such as action.

APPLICATION TO NCLT TO BAR DIRECTORS FOR 5 YEARS

As a result, it has decided to go back to the Companies Act 1956, which allowed the Centre to not just seek the removal of persons concerned with the management of a company and suspected of “fraud, misfeasance, persistent negligence or default in carrying out his obligations under the law or breach of trust” but also barred them from being appointed board members for five years from the date of removal. Under the new law the government will have to move an application before the NCLT.

LEVY OF PENALTY THAT DO NOT SPEND 2% TOWARDS CSR

MCA proposes to levy penalty on companies that do not meet the mandated 2% spending requirement towards corporate social responsibility (CSR).

The move to introduce a penalty on companies not meeting the CSR obligation was inserted as over 40% of the entities were not complying with the requirement, with close to a fifth not spending any money. “Companies have been given five years now. It is high time they start complying with the rules.

DISCLOSURE ON SBO

Companies now have to disclose the details of significant beneficial ownership, an obligation that was so far cast on shareholders. The government saw it as a loophole and has sought to plug it. The rules mandate that details of all shareholders with interest of 10% or more in a company, either direct or indirect, have to be disclosed.

MANDATORY DEMATERILISATION OF SHARES FOR ALL CATEGORY OF COMPANIES

The government has sought powers to mandate dematerialization of shares for all category of companies, a move that was recently extended to public unlisted companies. The step is seen to be crucial to identify the real owners of unlisted companies, which often remain hidden or can be benami holdings.

SPEEDING UP THE PROCESS FOR LISTING FOR COMPANIES

The government has proposed amendments to company law to strengthen the regulatory framework relating to the SFIO and NFRA, while simultaneously introducing measures to accelerate the listing process for companies.

NEW CSR IMPLEMENTATION OPTIONS

·      MCA has also amended Schedule VII to allow CSR spending via Zero Coupon Zero Principal (ZCZP) instruments issued by registered Not-for-Profit Organizations on Social Stock Exchanges.

·      Companies can allocate up to 10% of their CSR expenditure through these instruments.

·      This aims to ease compliance and provide transparent funding channels for NGOs.

BROADER AMENDMENTS IN THE BILL

DECRIMINALISATION OF OFFENCES:

Several violations will now attract civil penalties instead of imprisonment.

SIMPLIFIED COMPLIANCE:

·      Electronic service of documents permitted.

·      AGMs can be held virtually, but at least one physical meeting every 3 years is mandatory.

Certain companies may be exempted from appointing auditors.

·      Small company definition expanded: Paid-up capital limit raised to ₹20 crore; turnover limit raised to ₹200 crore.

Merger/amalgamation approvals: Threshold reduced from 90% to 75% shareholder/creditor approval.

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

LIC STAKE IN RAJESH EXPORTS SPARKS SCRUTINY AFTER SEBI FRAUD PROBE

 LIC STAKE IN RAJESH EXPORTS SPARKS SCRUTINY AFTER SEBI FRAUD PROBE

REGULATOR'S MASSIVE ALLEGATION:

SEBI claims Rajesh Exports inflated 97-99% of its revenue between FY21 and FY25, totaling ₹15.15 lakh crore, and obstructed investigations.

LIC'S INVESTMENT QUESTIONED:

LIC’s 10.8% stake has drawn political criticism, with opposition parties asking if the purchase was influenced by the ruling establishment.

SEBI'S UNPRECEDENTED ₹15.15 LAKH CRORE CHARGE

SEBI’s interim order alleges Rajesh Exports misrepresented almost its entire consolidated revenue between FY21 and FY25, largely through overseas subsidiaries like Valcambi SA. The regulator cited missing records, unverified foreign transactions, and non-cooperation from both the company and its auditors, who failed to provide promised working papers. It has barred Chairman Rajesh Mehta from the securities market, ordered a new forensic audit, and referred audit lapses to the NFRA.

FROM SHAREHOLDER TIP-OFF TO REGULATORY CRACKDOWN

The probe began after a March 2024 shareholder complaint flagged unusually large trade receivables outstanding for over two years. SEBI’s preliminary review led to a formal investigation spanning April 2020 to March 2024, with BDO India appointed as forensic auditor. The findings, described as “egregious and unheard of,” have since wiped out significant shareholder value and triggered a collapse in Rajesh Exports’ share price.

GOVERNANCE CONCERNS GROW:

 Experts say the episode exposes gaps in LIC’s due diligence and highlights systemic risks in institutional investment governance.

POLITICAL AND MARKET FALLOUT FOR LIC

LIC’s 10.8% holding in Rajesh Exports has prompted Congress to question whether the investment was politically influenced, given the scale of alleged fraud. LIC shares fell over 1% following the SEBI order, while Rajesh Exports dropped 5%. The controversy has intensified scrutiny of LIC’s investment decisions, especially its role as a custodian of policyholders’ funds

GOVERNANCE RED FLAGS AND SYSTEMIC LESSONS

Governance experts argue LIC failed to act on red flags and needs stronger due diligence and forensic reviews for investee companies. The case underscores broader concerns about corporate governance, auditor oversight, and institutional investor accountability in India. Analysts warn that other LIC portfolio companies may face similar undiscovered risks if oversight mechanisms are not strengthened.

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

ATANU CHAKRABORTY, INDEPENDENT DIRECTOR OF HDFC QUIT ON MARCH 18, 2026, CITING PRACTICES “NOT IN CONGRUENCE” WITH HIS VALUES- WHAT ARE THE PRACTICES NOT IN CONGRUENCE” WITH ATANU’S VALUES PERSUED BY HDFC BANK?

 ATANU CHAKRABORTY, INDEPENDENT DIRECTOR OF HDFC QUIT ON MARCH 18, 2026, CITING PRACTICES “NOT IN CONGRUENCE” WITH HIS VALUES- 

WHAT ARE THE PRACTICES NOT IN CONGRUENCE” WITH ATANU’S VALUES PERSUED BY HDFC BANK?

WHAT HDFC BANK’S INTERNAL VIGILANCE PROBE FOUND?

HDFC Bank’s internal vigilance probe (March–April 2026) confirmed that ₹45 crore in “differential interest” payments to Maharashtra State Road Development Corporation (MSRDC) were disguised as marketing spend via fake road safety sponsorships. The scandal coincided with Chairman Atanu Chakraborty’s resignation citing ethics, raising serious governance concerns.

KEY FINDINGS FROM THE PROBE

AMOUNT INVOLVED:

₹45 crore in extra interest payments to MSRDC deposits.

MECHANISM:

 Instead of crediting MSRDC directly, the money was routed through HDFC Bank’s marketing department and booked as “road safety campaign sponsorships” via four local vendors.

AUDIT TRIGGER:

An internal audit (FY2024–25) flagged the marketing department’s performance as “unsatisfactory,” prompting the Audit Committee to order a formal vigilance investigation on March 12, 2026.

LEADERSHIP INVOLVEMENT:

Internal records suggest HDFC BANK’S MD & CEO Sashidhar Jagdishan, CFO Srinivasan Vaidyanathan, and CMO Ravi Santhanam were aware of discussions on compensating MSRDC. Santhanam admitted the department acted as a “facilitator to camouflage” the payments.

CHAIRMAN’S RESIGNATION:

Atanu Chakraborty resignation on March 18, 2026, citing practices “not in congruence” with his values. His exit preceded public disclosure of the probe.

MARKET & REGULATORY IMPACT

STOCK REACTION:

HDFC Bank shares fell 2–2.5% on May 27, 2026, after reports surfaced.

REGULATORY ANGLE:

The arrangement potentially violated RBI rules on deposit interest rates and HDFC Bank’s own anti-bribery/governance policies.

REGULATORY BREACHES:

 1. RBI Master Directions violated

 2. Anti-bribery policy breached

 3. Vendor invoices inflated

WHY THIS MATTERS

GOVERNANCE BREACH:

Routing interest payments through marketing spend undermines transparency and raises questions about internal controls.

ETHICS VS. COMPLIANCE:

The chairman’s resignation highlights a clash between personal ethics and institutional practices.

INVESTOR CONFIDENCE:

Even relatively small sums (₹45 crore vs. HDFC’s scale) can trigger sharp stock declines due to governance fears.

                           RECOMMENDATION

RBI Should issue additional master circular to prevent this type of frauds in the Indian banking system to instill the investor’s confidence on the Indian banking system.

Will the SEBI take an action against HDFC Bank as it has ordered in the Suzlon’s Energy accounting fraud?

 

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

SEBI IMPOSES RS 29 CR PENALTIES ON SUZLON ENERGY, FORMER EXECUTIVES OVER TRANSFER OF ITS OPERATIONS & MAINTENANCE SERVICES (OMS) DEAL IRREGULARITIES

 SEBI IMPOSES RS 29 CR PENALTIES ON SUZLON ENERGY, FORMER EXECUTIVES OVER TRANSFER OF ITS OPERATIONS & MAINTENANCE SERVICES (OMS) DEAL IRREGULARITIES

FACTS OF THE CASE

SEBI has imposed penalties totaling over ₹29 crore on Suzlon Energy and several former executives for irregularities in the transfer of its Operations & Maintenance Services (OMS) business, including misstatements in financials and circular fund transactions.

Suzlon Energy itself faces a fine of ₹15.95 crore, while key former leaders such as Vinod R. Tanti and Girish R. Tanti were also penalized

ORIGIN:

 An anonymous complaint in December 2019 flagged concerns about investments, loans, impairment accounting, and related-party disclosures.

INVESTIGATION PERIOD:

 FY2014–15 to FY2019–20, plus the first three quarters of FY2020–21.

AUDIT:

Forensic audit conducted by Sarath & Associates.

TRANSACTION IN QUESTION:

In March 2014, Suzlon Energy sold its OMS business to its wholly-owned subsidiary, Suzlon Global Services Ltd (SGSL), for ₹2,000 crore.

The stated value of the business was only ₹77.08 crore.

Suzlon booked an exceptional gain of ₹1,922.92 crore in FY2013–14.

IRREGULARITIES FOUND:

·      ₹1,300 crore of the sale consideration was not received within 90 days.

·      Funds were allegedly routed through circular transactions between Suzlon Energy and SGSL in March 2017.

·      SGSL’s asset base expanded significantly despite limited prior operations.

·      Later, SGSL’s stake was sold to Suzlon Structures in FY2016 for ₹927.83 crore, generating another gain of ₹829.78 crore

ALLEGED REGULATORY VIOLATIONS BY SUZLON

·      PFUTP Regulations (2003): Prohibition of Fraudulent and Unfair Trade Practices.

·      LODR Regulations (2015): Listing Obligations and Disclosure Requirements.

·      SEBI concluded that Suzlon misrepresented financials and engaged in transactions that misled investors.

RISKS & IMPLICATIONS

CORPORATE GOVERNANCE:

Highlights weak oversight in related-party transactions.

INVESTOR CONFIDENCE:

Such penalties can erode trust in Suzlon’s financial reporting.

FUTURE COMPLIANCE:

 Suzlon will need stricter internal controls and transparent disclosures to avoid further regulatory action.

 

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

TO WHICH AUTHORITY WE HAVE TO APPEAL EITHER TO NCLT OR HIGH COURT AGAINST THE PENALTY ORDER PASSED BY ROC OR REGIONAL DIRECTOR OF MCA ?

 TO WHICH AUTHORITY WE HAVE TO APPEAL EITHER TO NCLT OR HIGH COURT AGAINST THE PENALTY ORDER PASSED BY ROC OR REGIONAL DIRECTOR OF MCA ?

APPEAL TO REGIONAL DIRECTOR

You must appeal to the Regional Director (RD) of the Ministry of Corporate Affairs (MCA) to challenge a penalty order passed by the Registrar of Companies (ROC). Neither the NCLT nor the High Court has jurisdiction as the first appellate authority for ROC penalty orders.

ROC ADJUDICATION ORDERS (PENALTY ORDERS UNDER SECTION 454)

Where the ROC acts as an Adjudicating Officer and imposes penalties:

·      Appeal lies to the Regional Director (RD) under Section 454(5).

·      The appeal must generally be filed within 60 days.

In such cases:

·      Direct appeal to NCLT is not provided under Section 454.

·      After the RD passes the appellate order, the usual remedy is:

·      Writ Petition before the High Court under Article 226/227 of the Constitution.

ROC ORDERS WHICH ARE DIRECTLY APPEALABLE TO NCLT

CERTAIN ROC ACTIONS ARE SPECIFICALLY APPEALABLE TO NCLT UNDER OTHER PROVISIONS OF THE COMPANIES ACT. EXAMPLES:

·      Strike off of company name under section 248

·      Appeal/restoration petition before National Company Law Tribunal under Section 252.

·      Refusal of registration/rectification matters in some cases.

·      Compounding and oppression/mismanagement related proceedings.

So, not every ROC order goes to RD first.

NO SECOND APPEAL

There is presently no statutory second appeal to NCLT/NCLAT against an RD order under Section 454.

RD ORDERS

RD orders are generally:

Final administrative appellate orders under the Act.

Usually challenged through:

High Court writ jurisdiction.

·      Only where the Companies Act specifically provides a further appeal mechanism can the matter go to NCLT/NCLAT.

PRACTICAL SITUATION

TYPE OF ORDER	FIRST APPEAL	FURTHER REMEDY
ROCpenalty/adjudication order under Section 454	RD	High Court (writ)
ROC strike-off order under Section 248	NCLT	NCLAT → Supreme Court
Certain RD administrative orders	Usually no statutory appeal	High Court

IMPORTANT CASE LAWS ON MAINTAINABILITY OF WRIT AGAINST RD ORDERS

Some important judgments dealing with the maintainability of writ petitions against orders of the Regional Director (RD) / Registrar of Companies (ROC) under the Companies Act are as follows:

1.M/S KHETAN INDUSTRIES PVT. LTD. V. UNION OF INDIA — DELHI HIGH COURT

The Delhi High Court held that a writ petition is maintainable against an RD order where:

·      the order is non-speaking,

·      principles of natural justice are violated,

·      or the authority fails to exercise jurisdiction properly

2. MUKUT PATHAK & ORS. V. UNION OF INDIA — DELHI HIGH COURT

This is one of the leading cases on ROC disqualification actions under Sections 164 and 167.

The Court entertained writ petitions directly against ROC actions because:

·      the dispute involved statutory violations,

·      civil remedies were ineffective,

·      and fundamental procedural safeguards were allegedly breached.

3. Madras Techno Marine Enterprises Ltd. v. Regional Director — Madras High Court

The Madras High Court entertained a writ against actions/circulars involving ROC and RD under the Companies Act.

Principle Where:

·      the challenge concerns ultra vires exercise of power,

·      unconstitutional circulars,

·      or arbitrary administrative action,

the High Court can exercise writ jurisdiction notwithstanding alternative remedies.

4. THE DELHI HIGH COURT  STAYED PENALTY ORDERS OF ₹27.1 LAKH IMPOSED BY ROC NEW DELHI AGAINST MICROSOFT & LINKEDIN OVER ALLEGED VIOLATIONS OF SIGNIFICANT BENEFICIAL OWNERSHIP (SBO) DISCLOSURE NORMS.

ROC NEW DELHI VS MICROSOFT & LINKEDIN

Yes. A stay can be obtained from the High Court against an ROC order or Regional Director (RD) order by filing a writ petition under Article 226 of the Constitution of India.

However, grant of stay is discretionary and depends on the facts of the case.

Situations Where High Courts Commonly Grant Stay

High Courts are more likely to grant interim stay where:

·      the ROC/RD acted without jurisdiction,

·      principles of natural justice were violated,

·      no proper hearing was granted,

·      the order is ex facie illegal,

·      penalty is disproportionately imposed,

·      the authority ignored statutory provisions,

·      serious civil consequences arise,

·      recovery/coercive steps are imminent.

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