CLC Industries Ltd Forensic Report - SOIC x StockScans Report

as of Aug 2026

CLC Industries’ record is a restructuring story, not an operating one. The company emerged from insolvency in May 2023 with a ₹150 crore payment cap, new promoters holding 95% of equity, and an unmodified audit opinion for FY2025-26. What sits underneath is a widening circle of promoter-family related-party approvals, a revenue line that went from ₹911 crore to zero and back to ₹402 crore, and a trail of disclaimers, qualified opinions, and unresolved balances that predates the reset.

Key findings

  1. Related-party limits far exceed turnover, while ₹3,487 crore of old balances stay unresolved Major - For FY2025-26, the AGM notice sought approval for material related-party transactions with seven promoter-family entities totalling ₹329 crore, against consolidated turnover of ₹401.96 crore. A postal ballot dated 18 November 2024 sought ₹550 crore across eight related-party transactions for FY2024-25 and FY2025-26, while stating the company had no operating income in the immediately preceding year and no valuation or external report was relied upon. As at 31 March 2024, balances with former management totalled ₹3,487.66 crore across twelve parties, based on FY2019 data with no further update.
  2. Audit opinions improved, but the trail shows missing records and weak internal audit Major - The FY2022-23 auditor issued a Disclaimer of Opinion, citing no evidence over inter-corporate deposits, advances, and corporate guarantees to promoter-group companies. FY2023-24 and FY2024-25 brought qualified opinions over unconfirmed balances, missing fixed deposit records, and unascertained MSMED interest. The FY2025-26 opinion is unmodified, but the auditor still states the internal audit system needs strengthening commensurate with the company’s size.
  3. The NCLT reset extinguished liabilities into reserves and recapitalised the company Major - Per the NCLT-approved Resolution Plan, all secured and unsecured liabilities existing on 3 January 2020 were extinguished except payments to certain creditors, and the extinguished amounts were transferred to the Capital Reserve Account. The plan extinguished 3,77,97,226 equity shares held by erstwhile promoters and issued 98,74,932 shares to Manjeet Cotton Private Limited and its nominees, giving new promoters 95% ownership. For FY2023-24, the company recorded a “Reserve as per resolution Plan” of 718.18 crore, while retained earnings stood at ₹(79,274.94) lakhs.
  4. A ₹150 crore cap, but disputed tax, guarantees, and government balances remain Major - The resolution plan approved on 12 May 2023 caps total payment obligations at ₹150 crore, with a clause that there shall be no additional payment obligations on the successful resolution applicant beyond that amount. As at 31 March 2026, disputed income tax dues pending at CIT (A) totalled 17.09 crore across five assessment years. The company contests a corporate guarantee to SBI Tokyo Branch for a loan to Spentex (Netherlands) B.V. of USD 22,009,732, arguing it is unenforceable because the ODI Form Part II was not filed with RBI.
  5. Reported borrowings understate obligations through related-party funding and guarantees Major - In FY2025-26, the company held an unsecured loan facility from Manjeet Cotton Private Limited for up to ₹25 crore at 8.00% p.a., repayable over 36 months from receipt. The HDFC Bank Term Loan and Working Capital Demand Loan were each personally guaranteed by two directors and secured by a corporate guarantee from Manjeet Cotton Pvt. Ltd.. Cash and cash equivalents included ₹3.86 crore in fixed deposits relating to a contingency reserve for future liabilities under the Resolution Plan, of which ₹5.00 lakhs were lien-marked against a bank guarantee.
  6. Revenue collapsed to zero, then restarted with receivables the company could not identify Major - Total revenue from operations fell from ₹911 crore in FY15 to ₹245 crore in FY19, then to zero in FY2023-24, before rising to ₹61.62 crore in FY2024-25 and ₹401.96 crore in FY2025-26. Trade receivables of 2.35 crore as at 31 March 2024 were fully provided for, with the company stating it was “in the process of identifying the parties from whom the said amount is receivable”. The company manufactures only one product, Cotton Yarn, so segment-wise details are not applicable.
  7. Auditor changed at the 31st AGM; the new firm’s peer review certificate expired in July 2024 Major - Shareholders appointed M/s. Ashok R. Majethia & Co. as statutory auditor at the 31st AGM on 29 December 2023, replacing R. N. Marwah & Co. LLP. The new firm’s peer review certificate from ICAI was valid from 1 August 2021 to 31 July 2024. The FY2025-26 Board’s Report states the appointment runs for five years from the 31st AGM to the 36th AGM, and that the auditor confirmed holding a valid peer review certificate, without specifying its validity period.
  8. Trading suspension and exchange penalties, but no SEBI or statutory penalties Major - Equity shares were suspended from trading on BSE and NSE from 12 January 2024 until 29 January 2026, and re-listed on 30 January 2026. During FY2024-25, the company paid a SOP fine of ₹10,91,000 to the stock exchanges for non-compliance with SEBI LODR 2015. On 14 October 2025, the company received a warning letter from NSE and BSE because the Audit Committee meeting held on 19 July 2024 was attended by only one Independent Director.

What to watch

Bottom line: This is a court-sanctioned reset with a clean FY2025-26 audit opinion, but the record around it is thin. The economic substance sits in promoter-family funding and guarantees, a revenue line rebuilt from zero, and unresolved balances that predate the insolvency. Watch whether the related-party approvals, the peer review renewal, and the government reconciliations turn from open items into settled ones.