Stanley Lifestyles Limited has informed the Exchange about a show cause notice received by its step down subsidiary
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Stanley Lifestyles has disclosed that its step-down subsidiary, Sana Lifestyles Limited, received a show cause notice from the Registrar of Companies (RoC), Bangalore, under Section 188(5)(ii) of the Companies Act, 2013. The notice alleges non-compliance with Sections 188 read with Section 184 regarding related party transactions during FY 2018-19, which were carried out without fresh or omnibus Board approvals. The RoC has also sought domestic transfer pricing audit reports and proof that the transactions were conducted at arm's length. The notice is directed at three individuals — two current Directors and one Ex-Director of Sana Lifestyles — each potentially facing a financial implication of ₹5,00,000. No penalty has been imposed yet, and the subsidiary is evaluating its response.
This is a show cause notice and not a final order, so there is no immediate penalty or financial hit to Stanley Lifestyles shareholders. However, the matter highlights past compliance lapses at the subsidiary level and could result in penalties or stricter regulatory scrutiny if not resolved favourably. Investors should watch for further updates on the subsidiary's response and any escalation.