Key Points
Legal expenses of India Inc. rose 20.98% in the last fiscal due to robust deal activities, heavy spending on disputes and increased compliance costs, according to the annual report of 3,972 companies listed on Indian bourses...
These companies spent 63,807 crore ($7.69 billion) in legal expenses for the year ended March 2023, up 20.98% from 52,741 crore in the previous year, data compiled by ETIG show...
Legal expenses include spending on litigation and arbitration, professional fees, regulatory filings, penalties, and general stamp duty among others...
"In addition, the Government, statutory authorities and courts have shown a higher tendency to impose greater and greater (than previously) fines and penalties in fit cases thus raising the amounts shown under 'legal expenses'," adds Desai...
"On account of the Covid overhang, companies were conserving cash in FY22 and deal-making and more importantly litigation, which was otherwise previously constrained due to government and judicial measures such as fewer investigations and penalties, limitation period moratorium and IBC moratorium may have increased significantly in FY23," said Avimukt Dar, founding partner of law firm IndusLaw...
