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NFRA Circular on Fraud Reporting and India Inc.’s Dilemma

Context:

In recent years, India has witnessed a slew of accounting frauds, especially in the booming start-up ecosystem. Even established players have not been able to escape the ‘fraud virus’, thereby tarnishing reputations built over centuries. Over the years, businesses in various key sectors of the Indian economy have been rife with corporate governance issues, as is evident from recent reports of alleged violations of accounting norms, overstatement of revenues and underreporting of expenses[1], delayed filing of documents for foreign direct investment received[2], as well as adoption of fraudulent practices for ever-greening of NPAs[3]. Despite the commendable work done by regulators in tightening various statutory provisions, corporate fraud seems to continue to plague India Inc.Continue Reading NFRA Circular on Fraud Reporting and India Inc.’s Dilemma

Forceful selling of Insurance by Automobile Dealers call for Regulation

Background

Automobile sector in India has been growing at a rapid pace, contributing to over 7% of India’s total Gross Domestic Product[1]. With annual sales exceeding 20 million passenger vehicles the mandatory vehicle insurance requirement has led to a commensurate increase in motor insurance business sales. This sector now constitutes 45% of the overall business of general insurance in India.[2]Continue Reading Forceful selling of Insurance by Automobile Dealers : Call for Regulation

Dark Side of Advertising: Decoding Dark Patterns for Platforms and Endorsers

Recent concerns with mis-advertising have led to various pro-consumer measures in India. This includes overhauling the consumer laws and attaching liability to platforms, sellers and advertisers (including influencers and celebrities) for misleading ads and malpractices.

The latest pro-consumer measure is the regulation of dark pattern practices, by way of notification of ‘Guidelines for Prevention and Regulation of Dark Patterns, 2023’ (“Guidelines”).Continue Reading Dark Side of Advertising: Decoding Dark Patterns for Platforms and Endorsers

Enforcing progressive compliance: Push for digitalisation by dematerialising shares of all companies

Pursuant to the issuance of the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023, with effect from September 30, 2024, both public and private limited companies are required to convert the existing shares and issue new shares exclusively in dematerialised form, bringing an end to physical share certificates. While this seems like a small change, this post seeks to trace the transformation of ‘dematerialisation’ from a progressive and secure option for security holders to a compliance requirement, signifying an increased and progressive threshold of regulation. The post also highlights the key challenges that companies and investors may face with this change.Continue Reading Enforcing progressive compliance: Push for digitalisation by dematerialising shares of all Companies