From Rats in the Kitchen to Gaps in Compliance….
The “Clean and Hygienic” has been the Buzz word in the food industry after multiple raids on all famous restaurants and food companies.
A restaurant may have a spotless dining area, attractive interiors and a five-star rating. But what happens when the kitchen door opens?
Just like a restaurant, a company may look perfectly compliant from the outside—until someone actually opens the kitchen door.
The Annual Report is the dining area. The website is the frontage. But the Board processes, policies, ROC filings related-party transactions, minutes, disclosures, statutory registers and secretarial records are the kitchen.
This should Alarm all the Compliance professionals to look back whether the Compliance Kitchen in every Company is Clean and Hygienic since the Compliance Regulator for both Listed and Unlisted Companies has always been on trend to investigate the non-compliances through Companies’ data which is filled with MCA and Stock Exchanges which acts as a ready-to-tasting platter for them,
It is essential that the compliances which are made through MCA and Stock Exchange filings are validated horizontally and vertically. One compliance filing should not contradict other filings and similarly data within the documents should also be accurate.
The Increasing trend of Adjudication orders by Registrar of Companies and Securities and Exchange Board of India, gives a strong message that the non-compliances have no Excuse and will not be entertained.
In Diwali, every house in India undergoes a “Swachata Abhiyan” even though houses are cleaned on daily basis for entire year, this activity is carried out usually to have deep cleaning and satisfaction that home is “Clean and Hygienic” similarly a Company may have various auditors or consultants but ideally a Company shall carry out Compliance Health Checks often to have a Deep Cleaning on certain critical subjects with an objective of correcting or validating the processes since certain processes may get outdated from time to time.
The real question, therefore, is not merely “Is your company compliant?”
It is:“If there were a surprise compliance inspection tomorrow, what would be found in your corporate kitchen?”
The Article is written by Partner – Mr. Omkar Dindorkar.