Your Weekly dose of Legal, Technology and Risk Insights
TOP STORY OF THE WEEK
SEBI Operationalises PaRRVA to Verify Market Performance Claims
SEBI has operationalised the Past Risk and Return Verification Agency, aimed at independently validating risk-return claims made in the securities market. The framework will help verify past performance data shared by investment advisers, research analysts and trading members. This is a major investor-protection move as it reduces the risk of selective or exaggerated return claims. For market participants, it also raises the bar for transparent, evidence-backed disclosures.
LEGAL & TECH
Supreme Court Hears Challenge to EC Appointment Law
The Supreme Court heard petitions challenging the 2023 law governing appointment of the Chief Election Commissioner and Election Commissioners. Petitioners argued that the law weakens institutional independence by replacing the Chief Justice of India in the selection panel with a Union Cabinet minister. The Court examined whether Parliament’s law-making choices can be tested against constitutional principles of independence and institutional autonomy. The hearing will continue next Thursday.
Supreme Court Flags Risk of AI-Generated Fake Judgments
The Supreme Court has urged the Bar Council of India to consider forming an expert panel to examine the growing concern around AI-generated fake judgments being cited in legal proceedings. The issue highlights the risks of unchecked AI use in legal drafting, research and court submissions. As AI tools become more common among lawyers, the need for verification, accountability and ethical usage becomes stronger. The development signals that courts may soon expect clearer safeguards around AI-assisted legal work.
SEBI Flags AI-Driven Cybersecurity Risks
SEBI has issued an advisory on emerging AI tools used for vulnerability detection and has constituted a task force called “cyber-suraksha.ai.” The move comes amid concerns that advanced AI tools can identify and exploit system vulnerabilities at speed and scale. SEBI said these risks can affect data confidentiality, application integrity and reliability of outputs across regulated entities. The task force will work on a uniform mitigation strategy for the securities market ecosystem.
CORPORATE COMPLIANCE
Gujarat HC Ruling Raises GST ITC Burden
A Gujarat High Court ruling has reportedly upheld denial of input tax credit where suppliers failed to deposit GST. Tax experts say this could increase compliance costs and working capital pressure for businesses, especially those operating through multi-layered supply chains. The ruling reinforces the need for stronger vendor checks, payment tracking and GST reconciliation. Businesses may now need to treat supplier compliance as part of their own tax-risk framework.
India Defends Voluntary SEBI–MCA Framework on Forced Labour Compliance
India has informed the U.S. Trade Representative that its current approach to forced labour-related compliance remains “soft and voluntary,” especially due to the practical difficulty of tracking violations across complex global supply chains. The update highlights the growing importance of labour rights, ESG disclosures and supply-chain due diligence for Indian companies engaged in exports or global trade. While the framework may not yet be enforcement-heavy, companies could face increasing pressure from investors, customers and international regulators to strengthen vendor checks, labour-risk mapping and ESG reporting.
Risk Intelligence
Reliance Documents Sought in Drone Import Bribery Probe
Reliance Industries has handed over documents sought by the CBI in a bribery probe involving drone import clearances linked to Asteria Aerospace, a Reliance-owned company. Reuters reported that a Reliance senior vice president and an aviation regulator official were arrested over alleged bribe arrangements for import approvals; the executive has been granted bail and the allegations have been denied. The development comes as Jio Platforms prepares for a major listing process.
Rs53 Crore Cyber Scam Network Busted in Gujarat
Gujarat CID Crime has busted an inter-state cybercrime racket involving transactions worth over Rs53 crore and arrested 10 accused. Investigators found a network of mule bank accounts used to route fraud proceeds, with 197 bank accounts identified and at least 60 linked to 132 cybercrime complaints across several states. One account was also allegedly connected to persons linked with the Baba Siddique murder case.
Fake Stock Trading App Scam Exposes Mule Account Network
Police have uncovered an interstate cyber fraud racket involving a fake stock trading app, where the victim was shown a false profit of Rs33 crore after investing Rs14.3 lakh. Investigators found that part of the money was routed through a company-linked bank account and then transferred further, indicating the use of mule accounts and layered transactions. The same account was reportedly linked to multiple cyber fraud cases across India. The case shows how fraudsters are combining fake investment platforms, corporate bank accounts and financial layering to move illicit funds.