SEBI SETTLES DISCLOSURE AND GOVERANANCE VIOLATION PROCEEDINGS AGAINST 5 ADANI GROUP ENTITIES FOR OVER RS 1.5 CRORES

 SEBI SETTLES DISCLOSURE AND GOVERANANCE VIOLATION PROCEEDINGS AGAINST 5 ADANI GROUP ENTITIES FOR OVER RS 1.5 CRORES

                                   FACTS

SEBI has settled adjudication proceedings against five Adani Group companies—Adani Enterprises, Adani Green Energy, Adani Total Gas, AWL Agri Business, and Adani Energy Solutions—for a combined settlement amount of about ₹1.51 crore.

The cases involved alleged lapses in disclosure of related-party transactions and audit/governance violations flagged in the Hindenburg Report

SETTLEMENT TERMS

·       The companies proposed settlement without admitting or denying guilt.

·       With receipt of settlement amounts, SEBI disposed of the proceedings under Section 15JB of the SEBI Act and Settlement Regulations

KEY TAKEAWAYS FOR LISTED COMPANIES

·       Ensure full disclosure of RPTs in annual reports.

·       Verify peer review status of audit firms before engagement.

·       Strengthen internal compliance monitoring to avoid lapses.

·       Be prepared for SEBI scrutiny even on older transactions if flagged by external reports or whistleblowers.

KEY TAKEAWAY

This case is a classic example of SEBI using settlement mechanisms to close long-pending proceedings while reinforcing disclosure standards

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

SODECIA INDIA PRIVATE LIMITED WAS PENALISED FOR NOT APPOINTING COMPANY SECRETARY Rs 10 LACS FOR MORE THAN 5 YEARS

 SODECIA INDIA PRIVATE LIMITED WAS PENALISED FOR NOT APPOINTING COMPANY SECRETARY Rs 10 LACS FOR MORE THAN 5 YEARS

ROC CHENNAI VS SODECIA INDIA PRIVATE LIMITED

LEGAL REQUIREMENTS

Section 203(1) of the Companies Act, 2013

·      Mandates appointment of Key Managerial Personnel (including a Whole-Time Company Secretary) for certain classes of companies.

·      Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

·      Requires every company with paid-up share capital ≥ ₹10 crore to appoint a Whole-Time CS.

·      Section 203(5)--Provides penalty for non-compliance.

FACTS OF THE CASE

·      The company’s paid-up share capital exceeded ₹10 crore, triggering mandatory CS appointment.

·      Despite this, the company failed to appoint a Whole-Time CS for a prolonged period:

·      Default period: 1,837 days / 2,045 days (approx. 5+ years)

·      The company later regularized the default by appointing a CS, but only after a long delay.

ROC CHENNAI FINDINGS

The Registrar held that:

·      The requirement under Section 203 is mandatory, not procedural.

·      Subsequent compliance does NOT wipe out past default.

·      Financial hardship or operational issues are not valid defenses.

PENALTY IMPOSED

·      ₹5,00,000 on the Company

·      ₹5,00,000 on the Officer in Default (Director/KMP)

·      Total penalty: ₹10,00,000

·      Penalty to be paid:

·      By officers from personal funds (not company funds).

KEY TAKEAWAYS

·      Maintain a KMP compliance tracker (CS, CFO, CEO).

·      Do not rely on:

·      Financial constraints

·      Administrative delays

These are not acceptable defenses before ROC.

CONCLUDING REMARKS

·      Non-appointment of a Company Secretary is treated as a serious governance failure, not a minor procedural lapse.

·      It is a clear reminder that Section 203 compliance is non-negotiable and time-sensitive.

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