In a regulatory filing, NDTV said, “Anoop Singh Juneja has resigned from the services of the Company. The Company has accepted his resignation and relieved him of his responsibilities w.e.f. 31 May 2014”.
As per the listing agreement, companies are required to submit documents like annual reports, shareholding pattern data, quarterly and full-year financial results, as also corporate governance compliance reports within stipulated time periods.
Recently the Indian Companies Act 2013 was brought into force to a great extent. This has significantly increased the regulatory compliance requirements in India. Especially, the liabilities of directors have been significantly increased under the new company law.
India has been struggling hard to deal with transfer pricing and taxation issues. Even Vodafone, Nokia and Shell received notices from income tax authorities of India regarding transfer pricing and other taxation issues. Indian government has also proposed establishment of Income Tax Overseas Units (ITOUs) of India in foreign countries.
India may also scrap the compulsory transfer pricing audit based on monetary threshold limits. In fact, Indian Tax Department has already received 232 applications from MNCs in 2013-14 for advance pricing agreement. The CBDT India has also directed chief commissioners to raise tax evasion issues with MCA for mergers and acquisition deals. The best part is the constitution of a Special Investigation Team (SIT) to probe black money deposited in foreign jurisdictions. The SIT has already started working towards this goal.
In these circumstances, companies cannot take the laws of India lightly as that may land them in trouble. Reporting and compliance requirements must be especially kept in mind by various companies.
Prannoy Roy-led New Delhi Television Ltd (NDTV) has been facing the regulatory heat these days. According to the media reports, NDTV was required to disclose the fact that it has received a Rs. 450 crore tax demand notice from the income tax department. However, NDTV failed to disclose the same to BSE or National Stock Exchange (NSE) about this notice and this may be a breach of the listing norms.
When BSE and NSE asked NDTV about this, NDTV argued that the demand notice was “without any basis or justification and contrary to provisions of Income Tax Act, 1961 and had resulted only due to erroneous and incorrect view taken by the tax department”. Hence NDTV saw it fit not to disclose anything about it. NDTV has also argued that the matter was “sub-judice” and that it has received a stay. Other listed companies, including Infosys, however, time and again have disclosed such information to the bourses
In short, the contention of NDTV was that the claim made by the tax department cannot be deemed as an enforceable tax demand against NDTV due and payable by it. The demand has resulted only due to erroneous and incorrect view taken by the tax department.
Earlier in February 2014, in a major crackdown against listed companies not complying with regulatory disclosure norms, NSE and BSE imposed fines or suspended trading in over 1,100 cases of non-compliance, involving nearly 600 companies. After finding hundreds of companies of not adhering to various provisions of listing agreement, market regulator Securities and Exchange Board of India (SEBI) had asked the stock exchanges to put a stronger mechanism in place to ensure compliance.
This non-disclosure of information prompted NSE and BSE to seek clarification from the company. While BSE has mentioned the notices it sent to NDTV, there are no details available at NSE. NSE just says that it sought clarification from NDTV based on a complaint.
When NDTV failed to provide specific response to its query, BSE again sent an email on 27th May to the company asking it to give point-wise reply. In its reply, NDTV said, “we have clarified our position with respect to the queries of exchange on various disclosures under listing agreement vide Company’s letters dated 16 May 2014 and 22 May 2014, wherein the company categorically explained the position as to how the company has not violated the provisions of clause 36 of the listing agreement”.