Tag: Ministry of Corporate Affairs

India extends deadline for comments on draft digital competition bill till May 15

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government has extended the deadline for submitting stakeholder comments on the draft digital competition bill by one month to May 15. It has also extended the deadline for submission of comments by stakeholders on the report of the Committee on Digital Competition Law (CDCL).

The initial deadline is to end on April 15. Earlier, the Ministry of Corporate Affairs (MCA) had invited comments from stakeholders on the report of CDCL as well as the draft digital competition bill under the e-consultation module by April 15.

However, in a notice on Tuesday, the ministry said it had considered “the requests received from various stakeholders, and the last date of submitting the comments/ suggestions is extended till May 15, 2024”. It also said stakeholders could send in their comments via email, apart from the e-consultation module.

Ministry of Corporate Affairs had invited comments/suggestions of stakeholders on the Report of Committee on Digital Competition Law (CDCL) as well as Draft Competition Bill on the MCA website under e-Consultation module by 15.04.2024. The date has now been extended till…

— Ministry of Corporate Affairs (@MCA21India) April 9, 2024

In March this year, the fair trade regulator proposed a digital competition bill which seeks to put in place several obligations for large digital enterprises, including news aggregators, as part of efforts to ensure a level playing field and fair competition in the digital space. After being set up in February last year, the Committee on Digital Competition Law came out with its report and a draft bill wherein the focus is on having ex-ante regulations to prevent possible anti-competitive practices.

The draft bill has put several obligations on Systemically Significant Digital Enterprises (SSDEs) in Core Digital Services (CDS) to operate in a fair and non-discriminatory way with end users and business users. CDS will cover online intermediation services, which will include news aggregators.

For SSDEs, the panel has recommended various thresholds, including a base value of ₹4,000 crore for Indian turnover, at least 1 crore end users or a minimum of 10,000 business users in India. Among others, the gross merchandise value (GMV) should be at least ₹16,000 crore and the global market capitalisation base value of $75 billion.

For unlisted companies, the committee has suggested that a value equivalent to a global market capitalisation that similarly indicates the financial position of unlisted companies is computed in a manner as may be prescribed by the central government. In case of violations, the panel has proposed a penalty of up to 10% of a company’s global turnover.

The bill has proposed ex-ante competition regulations for big tech players to ensure proactive monitoring of their behaviours and curb any possible unfair business practices.

Also Read: Explained | India’s upcoming Digital Competition Act and what is the debate around it all about

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

BYJU’s on MCA radar: Probing arm finds ‘over a dozen Companies Act violations and irregularities’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Uncertainty continues for edtech giant BYJU’s as the investigation arm of the Ministry Of Corporate Affairs (MCA) — Regional Director — has reportedly submitted a detailed report on the alleged financial irregularities.

“As per the report, the Regional Director has alleged over a dozen Companies Act violations and financial irregularities. The ministry, however, is yet to study the report in detail before deciding a future course of action,” sources told CNBC-TV18 on Thursday.

Following the analysis, the ministry will decide whether or not to refer the matter for further probe.

Also Read: BYJU’S vs investors: Karnataka High Court extends stay on EGM outcome until March 28

Usually, the MCA as per procedure, decides whether to order a further probe, and then the matter is referred either to the Serious Fraud Investigation Office (SFIO) or Directorate General (DG) of Investigations under the MCA.

Meanwhile, reacting to the story, BYJU’s spokesperson said, “We are not privy to any report by the MCA or the contents thereof. However, we can confirm that there are no financial irregularities whatsoever in the affairs of the company. In so far as the Companies Act is concerned any observations are likely to be technical non-compliances which have already been duly disclosed in our audited financial statements. We await any formal communication from the MCA.”

The future course of action recommended by MCA is yet to be seen.

Also Read: Byju’s disburses part of pending salaries for all employees for February

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Ministry of Corporate Affairs orders serious fraud probe on Vivo India; regional director to inspect MG Motor India

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Chinese companies continue to face the heat in India, this time the Ministry of Corporate Affairs has ordered detailed investigations over alleged financial irregularities in the books of account of MG Motors India and Vivo Mobiles India.

Sources have told CNBC-TV18 that “MCA’s oversight committee has ordered a SFIO (Serious Fraud Investigation Office) probe against Vivo Mobiles and has asked the regional director under DG investigations to probe MG Motors India.”

The probe is over alleged financial irregularities and the Chinese investments in these two companies.

Meanwhile, when CNBC-TV18 approached both the companies, MG Motor India said, “MGI has not been approached by MCA in the last few months. We were approached last year by them, and we fully cooperated with the authorities concerned and provided them with all relevant information, post which no further query was raised for us.”

But, Vivo India declined to comment on the story.

This move comes after Registrars of Companies (RoC) submitted the findings of its initial investigation over these allegations against both Vivo India and MG Motor India.

RoC after its investigations had advised the Ministry of Corporate Affairs for a detailed investigation as they found enough evidence of alleged irregularities, sources added.

To be seen is the final outcome of the probe against both MG Motor India and Vivo Mobiles India.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Ministry of Corporate Affairs likely to order probe into MG Motor and Vivo accounts, say sources

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Ministry of Corporate Affairs (MCA) is likely to recommend initiating a detailed investigation into the books of accounts of auto major MG Motor India and smartphone maker Vivo, sources told CNBC-TV18 on November 9.

This comes after MCA had earlier issued orders of inquiry and a Registrar of Companies’ (RoC) probe report has now been submitted. This probe by RoC began a year ago in 2022.

The probe was initiated in October 2022, the company had said “we are law abiding.” A more updated response to the November 2023 development is awaited.

The company had in October 2022 said it received a notice seeking clarifications primarily on why it has operational losses basis its annual report for the first year of operations 2019-2020.

According to the aforementioned sources, the RoC has submitted its report in the matter and alleged discrepancies in financial and fund movement. Following the analysis of the RoC report, MCA is likely to issue an order for investigation, sources said.

The development comes at a time when JSW Group and Shanghai-based SAIC Motor Corp are said to be in final talks to pick up a significant stake in MG Motor India.

Separately, the ministry is also likely to order an investigation into the accounts of Vivo. This is nearly a month after the Enforcement Directorate arrested four industry executives including one Chinese national working for the smartphone maker India in a case of alleged money laundering, according to legal papers and lawyers working on the case.

The arrest added to the legal troubles of the Chinese phone maker in India and came amid rising tensions between Beijing and New Delhi over issues ranging from border disputes to India’s increasing scrutiny of Chinese businesses and investment.

CNBC-TV18 has requested MG Motor India and Vivo India for comments on the latest development and is awaiting responses.

According to a Fortune India report, the ministry’s probes are part of a larger investigation into the alleged money laundering and tax invasion by Chinese multinationals operating in the country. As per an estimate, the government is investigating around 400-500 Chinese companies operating in India, the report said in November 2022.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India clears the deck for direct listing of companies in the overseas market

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian companies can now list on foreign stock exchanges, according to a Ministry of Corporate Affairs (MCA) notification of Section 5 of the Companies Amendment Act, 2020, released on Tuesday night.

The plan is to initially roll-out overseas listings through the GIFT City’s International Financial Services Centre (IFCS), followed by a broader direct listing.

The said amendment to the Companies Act 2013, initiated in 2020, authorising select companies to list directly on foreign stock exchanges. The amendment is now effective from October 30, 2023.

Sources also told CNBC-TV18 that the government might come out with clear guidelines and norms for the types of securities and companies that will be eligible for this direct listing. Earlier, CNBC-TV18 had reported on October 16 that the MCA and the Department of Economic Affairs (DEA) are in the advanced stages of creating the eligibility norms for such direct overseas listings of Indian companies.

The requisite minimum period of a company’s operations in India can be among the critera that the government can mull on, sources said.

Even as the recent notification speaks only about public companies, the government can also consider allowing such direct listing for unlisting private companies, according to the sources.

Earlier this year, Finance Minister Nirmala Sitharaman had mentioned that the government has decided to enable the direct listing of listed and unlisted companies on overseas exchanges at the IFSC. She added that the move can enable start-ups and other such companies to access the global markets through GIFT IFSC.

“This notification brings us one step closer to permitting Indian companies to list abroad. This could particularly be beneficial for new-age companies and start-ups looking to list abroad, where valuations and investor appetite/understanding may differ,” said Nitesh Mehta, Partner, M&A Tax at BDO India.

“However, one will need to wait for further details in this regard. Additionally, one of the key aspects to consider is the tax implications in India for foreign shareholders who trade such shares on overseas exchanges,” he added.

Currently, Indian companies can access the overseas equity markets only through depository receipts or by listing their debt securities on foreign markets.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Government in advanced stages of formulating rules for direct listing of companies abroad

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Ministry of Corporate Affairs along with the Departments of Economic Affairs is in advanced stages of formulating the eligibility criteria for Indian companies to list directly on foreign stock exchanges.

MCA sources told CNBC TV-18 that there would be a checklist for companies to avail the direct listing facility. A senior MCA official said that the criteria for direct listing could include the minimum period of operations for a company in India. Many other such proposals are on the list but no decision has been taken yet.

“There will be a minimum eligibility for companies to avail the direct listing facility. We are working on the rules. The company can’t be born yesterday and look to list tomorrow. There would be a minimum time of operation a company would need before it looks to list abroad,” said an MCA official.

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MCA officials also told CNBC TV-18 that adherence to corporate governance standards is not being stipulated for the overseas listing of companies. “Minimum governance standards for large unlisted companies are being deliberated by the company law committee but not in the direct listing rules,” a senior MCA official said.

The consultations between MCA and DEA are in advanced stages, but no specific timelines has been set for the release of the rules.

The proposed framework is in works to implement direct listing of Indian equities in international stock exchanges abroad. Such listing is already allowed according to the Companies Act 2013. The act was amended in 2020 to allow the direct listing of Indian companies on foreign stock exchanges. However, the framework to do so has not been formulated yet. Currently, Indian companies can access overseas equity markets by listing their debt securities or through depository receipts.

The government is currently looking to enable direct listing of Indian companies in GiftCity before allowing them to list directly overseas. MCA officials say that centre is looking to facilitate the direct listing in a phased manner.

Also Read: Quarterly earnings, crude prices, geopolitical uncertainties to dictate market trends this week

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Searching for lost, unclaimed shares to get easier on MCA’s new integrated portal

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Close to 117 crore unclaimed shares worth more than Rs 50,000 crore are lying in the Investor Education Protection Fund (IEPF), managed by the Ministry of Corporate Affairs (MCA). This includes dividends on these shares. However, the MCA is about to make the process of searching and claiming these ‘lost’ shares easier soon. 

In less than a month, the integrated IT portal for search and claims of these unclaimed shares will be functional. According to MCA officials, the search facility will be good to go in a month, but the claimed facility might take some more time and will continue to be available on V3 of MCA 21. So, in a month, Indian residents can do a status check of their lost shareholdings or unclaimed dividends of their parents or grandparents online.

The new integrated portal was mentioned by Finance Minister Nirmala Sitharaman in her budget speech this year. With the new portal, shares and dividends stuck in the IEPF are just a click away. Indian citizens can soon do a deep dive into an integrated IT portal to see the status of their or even their parents and grandparents’ lost wealth. 

The search module on the new portal can give you results by name, district etc. “In many cases, legal heirs don’t even know which company’s shares are in IEPFA. The search facility on the integrated portal gives you a way to search the shares held by your grandfather that remain unclaimed with IEPFA. You just need to do a search against his name or folio no or the district he belonged to,” a senior MCA official said.

Shares and dividends which remain unclaimed for more than seven years are mandated to be transferred to the IEPF. The Investor Education and Protection Fund Authority (IEPFA) is an initiative established under Section 205C of the Companies Act, 1956, through the Companies (Amendment) Act, 1999, with the primary objective of promoting awareness and protecting the interests of investors. 

This fund accrues from various sources including dividends, application money, matured deposits, and more, which have remained unclaimed for a period of seven years. Once these amounts remain unpaid or unclaimed for seven years, they are transferred to the IEPF. The IEPF is managed and administered by the IEPFA, established by the Government of India in 2016.

Claiming shares from the IEPF involves a process regulated by the IEPF Authority and needs a lot of documentation. The first step is checking eligibility and verifying whether the shares can be claimed, followed by downloading and filling out Form IEPF-5 from the IEPF website. Upon filling out Form IEPF-5, claimants need to submit a printout of the form alongside other necessary documents to the Nodal Officer of the concerned company at its registered office for verification. 

The company is then required to send a verification report to the IEPF Authority within 15 days of receiving the claim. All of this is done to protect investor money from fraud. In many instances, fraudsters claimed these unclaimed and forgotten shares from companies. Hence, a fool-proof process was devised for the claiming and searching of these shares and debentures.

Also Read:Online gaming company WinZo expands base to Brazil amidst taxation hurdles in India

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Exclusive | Stricter regulations for ‘bigger’ unlisted companies, mature start-ups on cards

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Company Law Committee (CLC) formed by the Ministry of Corporate Affairs (MCA) is discussing the possibility of bringing in stricter regulations for ‘bigger’ unlisted companies. The committee is also likely to define ‘bigger’ in terms of size and turnover.

Sources at the Corporate Affairs Ministry said to CNBC-TV18 that the Company Law Committee is deliberating stronger regulations for big unlisted companies to make them more accountable. They added that the discussions have picked up pace after the irregularities at ed-tech start-up BYJU’S.

In the past few months, tutoring startup BYJU’S faced fire after reports of failing to file its financial accounts on time and skipping an interest payment on its term loan. The ed-tech startup was also accused by its investors of hiding half a billion dollars.

The CLC is now discussing a broader framework to make bigger unlisted firms including mature start-ups under a stricter regulatory framework. Among other regulations, the committee is likely to deliberate higher levels of regulation on financial reporting. Mandatory submission of quarterly financial statements is among the regulations being discussed for these firms.

Quarterly financial reporting which is basically disclosure of information about the financials of the company is followed by all listed companies in India. The practice is essential for stakeholders to take timely action in case there are lapses or issues in the financials or financial reporting of a company. With the startup ecosystem becoming bigger and several unlisted companies becoming as big as their listed peers, the ministry is looking at parity in regulation.

Currently, listed entities are subject to comprehensive disclosure requirements, but the requirements are not applicable for unlisted companies. Recently, former Securities and Exchange Board of India (Sebi) chief, Ajay Tyagi, had called for a review of corporate governance compliance of mature startups.

Also, market watchdog SEBI spoke about the need for such regulations in its annual report. Sebi said that there is a need to identify, monitor and manage risks introduced into the securities market ecosystem by unlisted companies in a conglomerate with a complex set of listed and unlisted associates.

The tenure of the company law committee, which was formed by the MCA in 2019, has now been extended by a year to look at multiple issues, including regulation of bigger unlisted companies. The amendments to the Company’s Act are under inter-ministerial discussions as of now.

Also Read:BYJU’S appoints Arjun Mohan as India CEO after Mrinal Mohit quits

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Amid Go First crisis, MCA says monitoring civil aviation sector, looking into lessors’ concerns

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Ministry of Corporate Affairs is in touch with the Ministry of Civil Aviation over the ongoing insolvency proceedings in the Indian aviation sector, sources told CNBC-TV18 on July 11. They said the ministry is looking into issues raised by aircraft lessors in the cases of Go First and SpiceJet.

“The ministry is of the view that it should be easier for lessors to take their aircraft back once the airline goes into insolvency. The lessors’ have raised concerns that the planes are not being used and the payments are not made. This causes inconvenience,” an official said on condition of anonymity.

MCA sources said lessors may want to price the inconvenience in future leasing to airlines, which can cause issues for Indian airlines. The ministry will take a view on the issue soon, they said, adding that it is closely monitoring the aviation sector.

With two airlines filing for bankruptcy recently and two major players merging, MCA is also looking at it from a fair competition perspective.

Also Read: Go First for sale — August 9 deadline for potential bidders to express interest

The development comes against the backdrop of the National Company Law Tribunal (NCLT) allowing initiation of voluntary insolvency proceedings by Go First, which was als upheld by the National Company Law Appellate Tribunal (NCLAT).

Since the airline is under moratorium, lessors cannot take back their aircraft even as they argue the lease time period has terminated. Earlier this month, the Delhi High Court refused to direct India’s aviation regulator to re-register the cash-strapped airline’s aircraft. The court also allowed lessors to access the aircraft they leased to Go First to carry out maintenance at least twice a month while the airline has been restricted from removing any parts from the planes in question.

Go First blames Pratt & Whitney for its financial troubles and argues the US firm failed to supply engines on time. Pratt says those claims are without merit.

At the same time, IndiGo is unable to capitalise on Go First’s absence due to 25 grounded aircraft while SpiceJet’s plans to fill the void too are hit by lessors seeking deregistration of planes over unpaid dues.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Byju’s not facing SFIO probe yet, corporate affairs ministry investigating governance lapses

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Edtech giant Byju’s is currently not facing any investigation by the Serious Fraud Investigation Office (SFIO), sources in the Ministry of Corporate Affairs (MCA) told CNBC-TV18 on July 10, adding that the matter is still being probed by the ministry.

The decision on whether SFIO would investigate the case will be taken after the ministry concludes its investigation into Byju’s alleged governance lapses and compliance failures.

Meanwhile, Byju’s has also denied these claims. “I can confirm Byju’s has not yet received any communication from the MCA. Should a routine inspection take place, Byju’s will be happy to cooperate fully and provide all necessary explanations and clarifications,” said Zulfiquar Memon, Managing Partner, MZM Legal.

The development comes days after a The Hindu Business Line report on July 8 claimed the SFIO, a multidisciplinary body under the MCA, has commenced an investigation into Byju’s case, citing sources. The business daily, however, had clarified that BYJU’S said it has not received any communication from the SFIO on the launch of such a probe.

Last month, sources in the ministry had told CNBC-TV18 that it has ordered an inspection of the edtech for corporate governance lapses, however, Byju’s had denied getting information about any such inspection.

“Media reports suggesting that MCA has ordered an inspection into BYJU’S are speculative, and denied by us. We have not received any such correspondence from MCA regarding this, and are not aware of any such inspection,” a Byju’s spokesperson said on June 23.

Meanwhile, on July 4, Byju’s said its promoters have re-invested the entire amount raised by them through the secondary sale of shares in the company. According to private market intelligence firm PrivateCircle Research, promoters — Byju Raveendran, Divya Gokulnath and Riju Ravindran — have together sold shares worth around $408.53 million in 40 secondary transactions since 2015.

Also Read: In letter to employees, Byju Raveendran says ‘tough times may test us but… EdTech is here to stay’

PrivateCircle said Raveendran holds 15.90 percent, whereas Divya Gokulnath and Riju Raveendran have 3.32 percent and 1.99 percent, respectively.

Also, Bloomberg has reported that the Indian edtech startup and some of its lenders have restarted negotiations to restructure its $1.2 billion term loan. The lenders have delivered a detailed amendment proposal to the company calling for a debt pay down, coupon boost and investor protections on the loan, the report said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow