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Large direct-to-consumer (D2C) brands have started to scale down advertisements and influencer posts amid escalation of complaints about these brands putting out misleading ad claims and violating the Advertising Standards Council of India (ASCI) code.Personal care products maker Honasa Consumer, which owns Mamaearth, and has banked mainly on influencer marketing since it was launched in 2016, has significantly reduced influencer posts for over a week now. A spokesperson for Honasa Consumer said in an email that the company "acknowledges the evolving challenges of the advertising and marketing ecosystem".Honasa Consumer, which sells toxin-free lotions, shampoo and sunscreen, was named the biggest violator of advertising content for FY24 with 187 violations, according to ASCI's annual report released last month. The report also named Honasa's other brands including Dr Sheth's Skin and Hair Clinic, Aqualogica, The Derma Co and Ayuga as advertising violators. "We understand the gravity of the matter and have enhanced our internal protocols to ensure minimising the same," the Honasa Consumer spokesperson said.ASCI, which works closely with the department of consumer affairs, said in its report that it examined 10,093 complaints and investigated 8,299 advertisements for misleading claims and promotion of harmful products. The ASCI report also noted other large D2C players including HealthKart, FirstCry and Lenskart as violators of its advertising content.110948396The brands have frequently been called out by consumers on social media platforms alleging that claims made in ads and posts do not match the actual products.The Ghazal and Varun Alagh-founded Mamaearth claimed soon after ASCI's report that 95% of the violations were posts by influencers, who "forgot to mention the disclaimers that these were collaboration and sponsored posts", which was what brought them under the category of violators. Before the report, the beauty company collated 5,000-6,000 collaborations with influencers in a month.Nutrition products retailer HealthKart, which is among the brands named as a violator, does not post influencer posts on its main account on Instagram. However, it has separate accounts for its skin and hair products, where ads are posted by the brand or collaboratively posted by influencers including television actors such as Shivangi Joshi and Sargun Mehta.ASCI said the most common violations had to do with misleading claims, followed by promotions of harmful situations or products. According to existing guidelines by DoCA, all influencer posts need to disclose the benefits, incentives and relationship with the advertisers.Manisha Kapoor, chief executive and secretary general, ASCI, said in a statement that D2C brands in India are usually in the startup or rapid expansion phase when they start advertising. "Typically, their focus is on rapid acquisition of customers as they wish to show high valuations. In some cases, this takes priority over meeting regulatory requirements," Kapoor said.

Mumbai: Suraksha Realty, the successful bidder of Jaypee Infratech, will pay an exit price to the retail shareholders while taking the company private, setting a precedent in cases where distressed listed companies are being acquired through the Corporate Insolvency Resolution Process (CIRP).The successful resolution applicant of Jaypee Infratech will pay on a par with the liquidation value of the company to its shareholders holding about 542 million equity units while delisting the company from the stock exchanges. “The board of directors of the company has fixed June 21, 2024, as the record date for determining the names of the shareholders to whom the exit price will be paid for the purpose of delisting and subsequent extinguishment of issued equity shares,” said a regulatory disclosure. The company said that the existing public shareholders shall be given an aggregate exit at a price of Rs 14 lakh, which is not less than the liquidation value. "The payment to equity holders is a goodwill gesture," said a lender. Ashish Pyasi (partner) Aendri Legal, said the shareholders of a company are the last stakeholders in the waterfall mechanism provided under the insolvency code.“In most cases, the debt is so high that even the financial creditors are not fully paid and have to take a haircut under the plan so the question of the last person standing in the queue getting anything doesn’t arise,” said Pyasi. “Jaypee Infratech resolution plan is unique where the applicant is offering exit prices to the retail shareholders. Even in big cases like DHFL, a zero exit price was proposed. So in this sense, the step by the resolution applicant is unprecedented.” At the time of the approval of the resolution plan, the distressed builder had admitted liabilities of over Rs 23,083 crore, including Rs 9,783 crore from its secured financial creditors. “Payment to shareholders has been a bone of contention as generally as per Section 53 the payout is not even enough to pay financial creditors. This order will clearly set some precedent for future similar cases,” said Nipun Singhvi, managing partner of law firm NSA Legal. “Shareholders are at the bottom of the pyramid and payment to them is a ray of hope but varied practices. In the past, in cases such as National Steel and Agro Industries (NSAIL), Videocon Industries and Sintex Industries, their respective acquirers didn’t propose any payment to shareholders.” The development comes at a time when an investor in Reliance Capital (RCAP) has approached the Bombay High Court challenging the delisting of the company shares following the closure of the resolution process. Originally, Anil Ambani promoted RCAP was acquired by IndusInd International Holdings (IIHL) through the CIRP process. Last year, the National Company Law Tribunal (NCLT) approved Suraksha Realty's resolution plan wherein the winning bidder will offer about 2,500 acres to the bankers and about Rs 1,300 crore by way of non-convertible debentures. The company also proposed to complete all pending flats allotted to customers in about four years. Jaypee Infra shares closed at Rs 1.27 apiece, and the company has a market cap of Rs 176 crore.