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Business Ethics & Legal Compliance

Factories Act: Non-compliance leading to imprisonment

Hawkin’s CEO and factory manager sentenced to 6 months imprisonment for not maintaining Ambulance room in factory premises.

•    The CEO of Hawkins Cookers Limited and his Hoshiarpur Factory Manager have been held guilty for not maintaining an ambulance room in the factory, despite its applicability;

•      Both have been sentenced to 6 months’ imprisonment and an individual penalty of Rs. 25,000/-

Compliance Takeaway: Adhering to legal mandates is instrumental to any business. Violation shall lead to severe imprisonment much to the loss of the repute of the company and persons responsible for such non-compliance.

Ethics & Compliance: IL&FS Board and MCA proposes stringent punitive action against Audit Firms

Show-Cause Notice issued by IL & FS against Deloitte Haskins & Sells and KPMG’s audit partner BSR &Co. for alleged unethical audits.

•    IL&FS Board’s Action is in addition to the ongoing probe by MCA. Notice issued under Section 140 of the Companies Act;

•    MCA is of the view that defaulting firms should be stringently dealt with. Also proposes 5 year debarment for both auditors all across India;

•    24th May 2019 is the last date for filing replies. Decision to be taken on 29th May 2019

•    Both Deloitte Haskins & Sells and BSR jointly audited IL &FS accounts in FY18

•    BSR also audited IL & FS books in 2018-19.

•    As an initial punitive action Deloitte has already been removed from auditing services of 2 IL&FS companies.

Compliance Takeaway: As emphasised earlier in light of these cases, there is an urgent need for companies to urgently review their Ethics & Compliance Program and conduct stringent training programmes for executives across the board.

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