Annual Secretarial Compliance Report for the financial year ended March 31, 2025
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Arihant Capital Markets filed its Annual Secretarial Compliance Report for FY ending March 31, 2025, signed by Practicing Company Secretary Virendra G. Bhatt. The report flagged 11 non-compliance observations during the year. The largest penalty was Rs. 80.01 lakhs (under appeal with SAT) for violating Rule 8(3)(f) of Securities Contracts (Regulation) Rules, 1957, by extending loans of Rs. 13.07 crores to related entities and investing Rs. 7.11 crores in subsidiary companies beyond permitted scope. Other penalties included Rs. 1 lakh for incorrect data in weekly client fund monitoring, Rs. 50,000 for delayed client transaction funding (both under SAT appeal), and Rs. 1.26 lakhs in total for breaching NSE leverage and exposure limits under margin trading facility. An SEBI administrative warning was also issued for due diligence gaps in the IPO of Organic Recycling Systems Ltd. The Company has recalled the loans and is in the process of selling or transferring its subsidiary holdings.
The cluster of NSE and SEBI penalties highlights recurring compliance weaknesses, especially around margin trading exposure limits, client fund handling, and related-party lending. The Rs. 80 lakh penalty remains under appeal and, if not reversed, would be a material financial hit, though the ongoing subsidiary divestment and loan recall are constructive corrective steps. Investors should watch for SAT appeal outcomes and continued regulatory action on subsidiary restructuring.