M/s Devender & Company, Company Secretaries

26/08/2022

What is the Regulatory Authority of a Nidhi Company?

24/08/2022

What is a Nidhi Company? Does it require RBI approval or registration?

21/06/2022

Happy 8th International Day of Yoga.

08/04/2021

The Securities and Exchange Board of India (Sebi) has asked Indian companies to work towards separating the roles of chairperson and managing director (MD).

The deadline is a year away, but the market regulator is hinting that it won’t extend it.

“Listed entities were initially required to separate the roles of chairperson and MD/ CEO from April 01, 2020 onwards. However, based on industry representations, an additional time period of two years was given for compliance. The regulation will now be applicable to the top 500 listed entities by market capitalization, with effect from April 01, 2022. As at the end of December 2020, only 53 per cent of the top 500 listed entities had complied with this provision. I urge the eligible listed entities to be prepared for this change in advance of the deadline,” said Ajay Tyagi, chairman of Sebi, in a speech at the CII Corporate Governance Summit.

He said the rule is not to weaken the position of promoters but to improve corporate governance.

“The objective is to provide a better and more balanced governance structure by enabling more effective supervision of the management. Separation of the roles will reduce excessive concentration of authority in a single individual,” he said.

Other countries, too, have implemented a similar rule to avoid conflict of interest.

“Globally also, the needle seems to be moving more towards the separation of Chairperson and MD/CEO. In UK and Australia, the debate has tilted in favour of separating the two posts. Germany and Netherlands have a two-tier board structure, separating the roles of board and management,” he said.

The Securities and Exchange Board of India (Sebi) has asked Indian companies to work towards separating the roles of chairperson and managing director (MD)

17/03/2021

A Parliamentary panel on Tuesday suggested a thorough systemic review by the Reserve Bank to pre-empt IL&FS kind of crisis, involving systemically important entities.

The Standing Committee on Finance, chaired by Jayant Sinha, in its report said the resolution of IL&FS remains sub-judice before the National Company Law Appellate Tribunal (NCLAT).

"...delays in the resolution process not only brings a steep value erosion to the bankers and other creditors but more importantly leaves the understanding of the lacunae in the system evasive," it said.

The financial crisis in IL&FS came to light after some of its group entities defaulted on debt payments. The government in October 2018 superseded its board.

"...the Committee desires that a thorough systemic review should be conducted by RBI so that such episodes involving 'systemically important entities' are pre-empted," the report said.

The committee said startups with the requisite capability and expertise be encouraged to join the credit rating industry. This might aid in fostering healthy competition and also eliminating complacency in the credit rating industry.

"The Committee further recommend the watchdogs to be more alert and prudent in their enforcement of regulations instead of curbing the growth of credible startups in the industry," the report said.

The panel also noted that the RBI and Sebi have started a joint inspection of credit rating agencies with the role of the central bank specifically focussed on bank loan ratings assigned by CRAs. It said that regulators should remain alert and pro-active to ensure strict enforcement of the regulations.

"The committee would like to re-stress on the need for a fresh evaluation of the credit rating framework in the country .... with a view to reinforcing public confidence in the entire process of credit rating," it added.

A Parliamentary panel on Tuesday suggested a thorough systemic review by the Reserve Bank to pre-empt IL&FS kind of crisis, involving systemically important entities

17/03/2021

SEBI made note of key concern areas that are coming in the way of smooth UPI transaction for IPO investment and notified operational guidelines for resolving the same.

As per the new norms, investment bankers as well as brokers will be liable for any lapses and would need to compensate IPO applicants by paying Rs. 100 per day or 15 percent per annum interest on the IPO application amount, whichever is higher.

The new framework would address issues related to delay in receipt of mandate by investors for blocking of funds due to systemic issues at intermediaries and failure to unblock the funds in cases of partial allotment by the next working day from the finalisation of Basis of Allotment (BOA), Sebi said in a circular.

Further other issues that would be taken care of include Self Certified Syndicate Bank (SCSB) blocking multiple amounts for the same Unified Payment Interface (UPI) application and SCSB blocking more amount in the investors account than the application amount.

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On Tuesday, the capital market watchdog SEBI issued guidel¬ines with an aim to deal with grievances of IPO investors and in particular of those making payments via the unified payment interface (UPI) route.

16/03/2021

A probe by the Serious Fraud Investigation Office (SFIO) has so far revealed that Sahara Q Shop investments were being converted into other schemes in Saharayan Universal Multipurpose Society Ltd, Sahara Credit Co-operative Societies and two other societies of the group, Union minister Nirmala Sitharaman said on Monday.
The SFIO, which comes under the corporate affairs ministry, has been entrusted with the investigation into the affairs of Sahara Q Shop (SQS) and eight other companies of the Sahara Group.

In a written reply in the Lok Sabha on Monday, Sitharaman -- who is in charge of finance and corporate affairs portfolios -- said the corporate affairs ministry has been receiving large number of complaints, "approx. 17,000 from investors and through various authorities for non-payment of investment amount against Sahara Q Shop Unique Products Range Ltd".

An SFIO probe was ordered into the affairs of Sahara Q Shop Unique Products Range Ltd, Sahara Q Gold Mart Ltd and Sahara Housing Investment Corporation Ltd on October 31, 2018.

According to the minister, the SFIO has examined that majority of the complaints pertain to collection of deposits on false assurance, conversion of investments of Sahara Housing Corporation Ltd and Sahara India Real Estate Corporation Ltd into Sahara Q Shop and other Sahara group companies, and conversion of deposits from Sahara Q Shop to co-operative societies of Sahara Group.

Complaints also relate to non-payment of maturity deposits and forceful conversion of money of investors into other group companies.

"There are complaints alleging the conversion of investments of Sahara Housing Corporation Ltd and Sahara India Real Estate Corporation Ltd. The directors of these companies of Sahara have confirmed the conversions during the investigation by SFIO.

"The collection/ repayments/ conversions have been done through a partnership firm namely ''Sahara India'' and huge fund flow is seen from Sahara India into the books of account of Sahara Housing Corporation Ltd and Sahara Q Shop. Funds have been transferred from Sahara Housing Corporation Limited to Sahara Q Shop also," the minister said.

She also said the database of the investors of SQS and other group entities which have collected money from public has been obtained and the database revealed that the money collected across 26 states of the country is through 2.77 crore policies.

The data regarding the cases lodged by the investors in different states is not maintained by the corporate affairs ministry, she added.

"The investigation by SFIO so far has revealed that SQS investments are being converted into other schemes in Saharayan Universal Multipurpose Society Ltd, Sahara Credit Co-operative Societies and two other societies of the group. SFIO is entrusted with the investigation into the affairs of Sahara Q Shop and eight other companies of the Sahara Group," the minister said.

In the written reply, the minister cited a Supreme Court order, dated August 31, 2012, wherein Sebi was directed to make refund to only those investors who invested in Optionally Fully Convertible Debentures (OFCDs) of Sahara India Real Estate Corporation Ltd (SIRECL) and/ or Sahara Housing Investment Corporation Ltd (SHICL).

"Prima facie refund to investors of Sahara Q Shop is not covered under Hon''ble Supreme Court order," the minister said. PTI RAM ABM ABM

The SFIO, which comes under the corporate affairs ministry, has been entrusted with the investigation into the affairs of Sahara Q Shop (SQS) and eight other companies of the Sahara Group.

16/03/2021

Union minister Anurag Singh Thakur on Monday said there is no proposal under consideration to use CSR funds for government projects.

Under the companies law, certain class of profitable companies are required to shell out at least 2% of their three-year annual average net profit towards Corporate Social Responsibility (CSR) activities in a particular fiscal.

To a query in the Lok Sabha on whether the government is also considering to divert CSR funds for government projects, the minister replied in the negative.

"No such proposal is under consideration of the government. CSR is a board driven process and the Board of the company is empowered to decide the activities to be undertaken as per Schedule VII of the Companies Act, 2013 taking into consideration the recommendation of its CSR committee," Thakur said in a written reply.

'CSR is a board driven process and the Board of the company is empowered to decide the activities to be undertaken as per Schedule VII of the Companies Act, 2013 taking into consideration the recommendation of its CSR Committee', MoS for finance Anurag Singh Thakur said

16/03/2021

The Finance Ministry on Friday notified the New Format of ‘Annual Report’ for Security and Exchange Board of India (SEBI). An amendment to the Securities and Exchange Board of India (Annual Report) Rules, 2021 aims at reworking the new format is re-arrangement of contents to be presented. Also, income and expenditure will be required to be part of the annual report as against the existing provision of presenting annual account statements separately.

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The Finance Ministry on Friday notified the New Format of ‘Annual Report’ for Security and Exchange Board of India (SEBI).

16/03/2021

The Reserve Bank of India (RBI) has decided to extend the cheque truncation system (CTS) across all bank branches by September 2021 in a bid for faster and smoother cheque clearances in the country.

“To leverage the availability of CTS and provide uniform customer experience irrespective of location of her/his bank branch, it has been decided to extend CTS across all bank branches in the country,” the RBI said in a circular to all the commercial banks.

“Banks will have to ensure that all their branches participate in image-based CTS under respective grids by September 30, 2021,” the RBI said. They are free to adopt a model of their choice, like deploying suitable infrastructure in every branch or following a hub & spoke model and concerned banks should coordinate with the respective Regional Offices of RBI to operationalise this system, the central bank said.

“To leverage the availability of CTS and provide uniform customer experience irrespective of location of her/his bank branch, it has been decided to extend CTS across all bank branches in the country,” the RBI said in a circular to all the commercial banks.