July 4th,2018 Update.

Reserve Bank of India:

  • Enforcement action framework in respect of statutory auditors for the lapses in the statutory audit of commercial banks:

To foster market confidence in bank’s financial statements, in the interest of improving audit quality and with a view to instituting a transparent mechanism to examine accountability of Statutory Auditors in a consistent manner, it has been decided to put in place a graded enforcement action framework to enable appropriate action by the RBI in respect of the banks’ Statutory Auditors for any lapses observed in conducting a bank’s statutory audit. The framework would cover, inter alia, instances of divergence identified in asset classification and provisioning during the RBI inspection vis-à-vis the audited financial statements of banks above the threshold specified in the RBI circular DBR.BP.BC.No.63/21.04.018/2016-17 dated April 18, 2017.

The link is given hereunder:


Ministry of Corporate Affairs:

  • Notices have been issues by the Registrar of the companies proposing to strike off the names of the companies from the register of the companies and dissolve them.

In case where the Directors wishes to continue the company:

The Directors should file all the pending Forms AOC-4 and MGT-7 along with the representation letter to the registrar within one month from the date of issue of such notice.

In case where the director does not wish to continue with the company:

The Directors should file all the pending Forms AOC-4 and MGT-7 along with representation letter and requisite strike off form with the Registrar along with the fees and penalty within one month.

Regulator’s News:

  1. SEBI slaps NSE with show-cause notice in co-location case

On 4th July, 2018, the Capital markets regulator SEBI has served a show-cause notice on NSE in the co-location case. Investigations have revealed a breach of systems at NSE and grant of unfair access to select brokers. The SEBI notice alleged a violation of Securities Contract Regulation Act (SCRA) and Fraudulent and Unfair Trade Practices (FUTP). Statements of 100 individuals were recorded as part of the probe. Similar show-cause notices were also issued against a few former senior NSE employees.

The co-location case alleges that NSE’s trading architecture was abused by brokers to gain preferential access to system and data which are being probed for direct connivance and manipulation of trading systems.

  1. The Serious Fraud Investigation Office (SFIO) suspecting fraud, SEBI orders forensic audit of Fortis Healthcare

SEBI orders a forensic audit into the affairs of Fortis Healthcare following suspicion of financial fraud of Rs. 473cr. SFIO expected to submit its findings to corporate affairs ministry by Aug’18.



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