Latest news with #NCLT
Mint
an hour ago
- Business
- Mint
Corporate affairs ministry's warning—related-party violations attract penalties
New Delhi: The ministry of corporate affairs has reminded business promoters of the penalties for not following an arms-length approach in transactions involving company directors, executives, relatives and firms linked to such persons. Emphasising the importance of adhering to guidelines covering related-party transactions to ensure transparency, fairness, and long-term sustainability of businesses, the ministry said such deals are prone to conflicts of interest. The ministry's reminder comes amid ongoing proceedings against executives of Gensol Engineering Ltd for alleged diversion of funds to various related parties in violation of rules under the Companies Act. The National Company Law Tribunal (NCLT) last week allowed the Central government to attach the bank accounts and lockers of Gensol Engineering, its 10 subsidiaries, and several individuals after investigations by multiple agencies and regulators revealed systemic fraud, Mint reported on 28 May. The ministry stated in its newsletter for April released over the weekend that the company law prescribes penalties for directors or employees who violate provisions regarding related-party transactions. 'In a listed company, they could face a penalty of ₹ 25 lakh. For other companies, penalty is of ₹ 5 lakh,' the ministry said. As per the Companies Act, the consent of a company's board of directors is required for any contract or arrangement with a related party for any sale or purchase of goods and property, leasing of property, availing of services, or appointing agents for such transactions. Also, subscribing to the shares of a related-party entity requires board approval. However, related-party transactions that happen in the ordinary course of business and are on an arms-length basis do not need board approval, as per law. Related-party transactions remain in the focus of regulatory authorities because erring businesses and promoters tend to use this route to divert funds raised for specific purposes to privately held entities linked to or controlled by them. Such illicit fund transfers short-circuit the normal functioning of a company. Given the role of related-party transactions in corporate scandals, audit watchdog National Financial Reporting Authority (NFRA) keeps special focus on how religiously statutory auditors of a company check such transactions before giving an opinion on the affairs of the company. The ministry's newsletter stated that the legal provisions in the Companies Act on related-party transactions seek to ensure such deals do not undermine investor confidence or the integrity of the financial system. 'Ultimately, these provisions reflect the growing importance of robust governance practices that align with global best practices, contributing to the long-term sustainability and growth of companies in India,' the ministry said in its newsletter.
India.com
18 hours ago
- Business
- India.com
Billionaire Anil Agarwal plans to raise up to Rs 5000000000 via...
New Delhi: Anil Agarwal-led mining firm Vedanta Ltd on Friday, May 30 said the committee of directors has approved raising up to Rs 5,000 crore via issuance of debentures. The committee approved the issuance of 5 lakh unsecured, rated, listed, redeemable non-convertible debentures (NCDs) of face value of Rs 1 lakh each on a private placement basis, according to a regulatory filing by Vedanta. 'The duly authorised committee of directors at its meeting held today has considered and approved the issuance of unsecured, rated, listed, redeemable, non-convertible debentures (NCDs) on a private placement basis aggregating up to Rs 5,000 crore,' the company said in the filing. In the January-March quarter, Vedanta reported a 154.4 per cent growth in its consolidated net profit to Rs 3,483 crore which was pushed by lower production costs and higher volumes. The company had posted a net profit of Rs 1,369 crore in the year-ago period. During Q4 FY25, its income rose to Rs 41,216 crore from Rs 36,093 crore in the year-ago period. As on March 31, 2025, the company's gross debt stood at Rs 73,853 crore. A top official of the company said that the demerger of its businesses is expected by the end of September this year. 'We are on track to finish (the demerger) by the second quarter end,' said Vedanta CFO Ajay Goel while talking to news agency PTI. Vedanta Ltd is one of the world's leading natural resources, critical minerals, energy, and technology companies spanning across India, South Africa, Namibia, Liberia, the UAE, Saudi Arabia, Korea, Taiwan, and Japan with significant operations in sectors like oil and gas, zinc, lead, silver, copper, iron ore and steel. The appellate tribunal National Company Law Appellate Tribunal (NCLAT) has stayed the National Company Law Tribunal (NCLT) orders against the demerger of the multinational mining company into separate entities and subsequent listing. The Mumbai bench of NCLT had on March 4, 2025 rejected the first motion petition moved for the composite scheme of arrangement between Vedanta in the matter of Talwandi Sabo Power Ltd (TSPL), observing that 'material facts have not been disclosed' regarding its debt obligations, which was against the Companies Act. (With PTI inputs)
The Hindu
2 days ago
- Business
- The Hindu
Dr. Reddy's gets I-T Dept order for notice over ₹2,396 crore tax demand
The Income-Tax Department has issued an order that paves way for notice to generic drugmaker Dr. Reddy's Laboratories over almost ₹2,396-crore tax demand. The Assistant Commissioner of Income Tax, Circle 8(1), Hyderabad, in a May 30 order, deemed it appropriate to issue a notice under Section 148 of the Income-tax Act, 1961 to assess or reassess the income for assessment year 2020-21, Dr. Reddy's said in a filing on Saturday. The order follows a show cause notice in April on why a notice should not be issued for assessment of income 'alleged to be escaped from tax consequent to the merger of Dr. Reddy's Holding into Dr. Reddy's under a scheme of amalgamation approved by the National Company Law Tribunal (NCLT), Hyderabad on April 5, 2022. As per the April 4, 2025 notice, the tax demand was quantified at ₹2,395,81,79,470, Dr. Reddy's said. The scheme of amalgamation was carried with adherence to all legal requirements, including tax laws, and approved by NCLT, Hyderabad, on April 5, 2022 with effect from the appointed date April 1, 2019. The company said it strongly believes that there is 'no escapement of tax pursuant to the said merger scheme.' Nonetheless, it is reviewing the order/notice and will take actions as required, appropriately, Dr. Reddy's said. 'Based on our assessment, there is no material impact on the financials, operations, or other activities of the company at this stage,' it said.
Time of India
2 days ago
- Business
- Time of India
In a relief to Vedanta, NCLAT stays orders against company's demerger
Photo/Agencies NEW DELHI: In a relief to Vedanta, the appellate tribunal NCLAT has stayed the National Company Law Tribunal orders against the demerger of the multinational mining company into separate entities and subsequent listing. The Mumbai bench of NCLT had on March 4 rejected the first motion petition moved for the composite scheme of arrangement between Vedanta in the matter of Talwandi Sabo Power (TSPL), observing that material facts have not been disclosed regarding its debt obligations, which was against the Companies Act. This was immediately challenged before the NCLAT, which earlier this week stayed the order passed by the NCLT bench till its next hearing, scheduled on Aug 4, 2025. The appellate tribunal said: "Issues raised before us need to be considered at length and presently in view of the submissions made the scheme is severable and thus in case the stay is not granted to the impugned order it may affect the second motion application filed in respect of other three transferor companies pending in different tribunals." A two-member NCLAT bench also agreed to the proposal of submission of a bank guarantee of Rs 1,245 crore claimed by its creditor Sepco Electric Power Construction Corporation, without prejudice to their rights. The first motion application is usually filed before the NCLT by the transferor and transferee companies. The second motion then follows after the first motion is granted, allowing for the court to fully evaluate the scheme. agencies Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
3 days ago
- Business
- Time of India
NCLAT stays order against Vedanta's power business demerger
New Delhi: Appellate tribunal NCLAT has granted an interim stay on an order of the National Company Law Tribunal ( NCLT ) rejecting demerger of Vedanta 's power business and its merger with resultant entity Talwandi Sabo Power Ltd (TSPL). The order came as a relief to Vedanta Ltd which is in the process of demerging its businesses into separate entities. In a filing to BSE, Vedanta said the NCLAT order dated May 27, 2025 granted an interim stay on the order passed by the NCLT's Mumbai bench dated March 4, 2025 "to the extent it relates to the rejection of the scheme", subject to fulfilling the conditions mentioned in the order. Vedanta said that it remains committed to its strategic reorganisation plan and continues to work towards unlocking long-term value for all stakeholders. A two-member NCLAT bench said "the issues raised before us need to be considered at length and presently in view of the submissions made the scheme is severable and thus in case the stay is not granted to the impugned order, it may affect the second motion application filed in respect of other three transferor companies pending in different tribunals". The matter has been listed for the next hearing on August 4. Earlier, the Mumbai bench of NCLT had dismissed the petition of TSPL on the demerger scheme after objections were raised by SEPCO, a creditor of TSPL. The NCLT had observed "material facts have not been disclosed by the applicant company, violating Section 230 (2)(a) of the Companies Act, 2013, which in our considered opinion is bound to prejudice the public interest at large". The NCLT's ruling came after China-based SEPCO Electric Power Construction Corporation objected to the demerger, saying the power unit had deliberately excluded their outstanding debt of ₹1,251 crore from the list of creditors. SEPCO alleged that TSPL had concealed the information about its liabilities. "This has been done deliberately to defeat SEPCO's rights," the NCLT had said. According to a Vedanta spokesperson, the NCLT ruling pertained only to the TSPL application and the power business undertaking and does not impact or alter the progress of the other business undertakings proposed to be demerged. SEPCO was listed as an unsecured creditor to the extent of ₹1,251 crore, which would constitute more than 75 per cent of the unsecured debt by value, and as a result of the same, the vote by SEPCO itself would have been against the scheme, potentially impacting the interest of TSPL. The tribunal had said that the non-disclosure of such a significant liability could prejudice the interests of creditors and shareholders, and the valuation of TSPL conducted without factoring in SEPCO's claim was flawed and could impact public interest. The scheme, filed under Sections 230 to 232 of the Companies Act, 2013, involved the demerger of Vedanta's business verticals into five separate entities-- Vedanta Aluminium Metal, Talwandi Sabo Power, Malco Energy, Vedanta Base Metals and Vedanta Iron and Steel. It was aimed to create independent, globally competitive companies, each focusing on its core business and attracting specialised investors and stakeholders. The boards of the respective companies had approved the scheme between September and October 2023. Anil Agarwal-led Vedanta Ltd is expecting to complete the demerger of its businesses by September-end this year. PTI
