Radha Madhav’s CIRP Waiver: Post-Insolvency Compliance Challenges

Radha Madhav Corporation Limited has formally petitioned both BSE Limited and National Stock Exchange of India Limited to waive penalties incurred for non-compliance with market regulations between March 2015 and August 2022. This request provides a compelling case study on how the Corporate Insolvency Resolution Process (CIRP) fundamentally alters a company’s regulatory obligations and the subsequent implications for market oversight.

The company attributes these historical non-compliances directly to its period under CIRP, which commenced on October 22, 2020, and concluded on August 1, 2022. A new management assumed control following the National Company Law Tribunal (NCLT), Ahmedabad Bench’s approval of a Resolution Plan. Radha Madhav Corporation asserts that, based on paragraph 27 of the NCLT order, the new Resolution Applicant should not bear responsibility for claims against the Corporate Debtor that predate the CIRP’s initiation.

This framework from the NCLT order is crucial, delineating a clean slate for new management post-resolution regarding pre-existing liabilities, including regulatory penalties. It raises a structural question about how exchanges and regulators should interpret and apply compliance frameworks to entities undergoing or emerging from insolvency, where control and responsibility are dynamically shifting.

Furthermore, Radha Madhav Corporation clarified its non-compliance with Corporate Governance Regulations (Regulations 17 to 27). The NCLT order significantly reduced the company’s share capital from 9,12,95,775 to 6,82,185 equity shares. This reduction positions the company below the thresholds of ₹10 Crore paid-up equity share capital and ₹25 Crore net worth, making specific corporate governance provisions under Regulation 15(2) of SEBI (LODR) Regulations, 2015, non-mandatory.

This demonstrates how a change in capital structure, often a consequence of CIRP, can directly impact a company’s regulatory classification and the applicability of governance mandates. Understanding these thresholds is vital for assessing the true compliance landscape of restructured entities.

Regarding the absence of consolidated financial results for the quarter ended December 2025, Radha Madhav Corporation explained that a proposed acquisition of a majority stake in Phytoatomy Private Limited, announced on November 4, 2023, has not yet been completed. Consequently, the requirement for submitting consolidated financial results under Regulation 33 of SEBI (LODR) Regulations, 2015, remains inapplicable until the acquisition finalizes.

The company confirmed that all filings from August 1, 2022, onwards are current and accurately reflected on the BSE Portal. They reiterated that filings prior to this date were outside their control due to the Resolution Professional’s oversight during the insolvency period. This distinction between pre- and post-resolution filing responsibility is a key aspect of post-CIRP accountability that markets must navigate.