Drishya Infratech Limited ('DIL') was incorporated in 1998 as a private company and was converted into a public limited company in 2007 and got listed, when it undertook large-scale expansion in construction, energy, and

Drishya Infratech Limited ('DIL') was incorporated in 1998 as a private company and was converted into a public limited company in 2007 and got listed, when it undertook large-scale expansion in construction, energy, and allied manufacturing services. Headquartered in Chennai, the Company rapidly diversified into real estate, renewable energy, logistics, and even financial services through subsidiaries. With a paid-up capital of ₹ 1,200 crore and consolidated annual turnover of ₹ 8,500 crore, DIL positioned itself among India's fastest-growing conglomerates. The Board of Directors consisted of twelve members, including four independent directors, one woman director and promoter/executive directors. Though compliant with the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, proxy advisory firms often commented that the independence of directors was more on paper than in substance, given the long-standing personal and professional ties of most "independent" directors with the promoter family. Other mandatory committees were duly constituted, but their functioning was often perfunctory, with decisions driven largely by the promoter-chairman, Ranjhan, whose family collectively held 58% of the Company's equity. In the early years of its growth, DIL emphasized on being a compliant organization and even claimed to have adopted global best practices, including OECD Principles of Corporate Governance and United Nations Sustainable Development Goals (SDGs). It presented glossy annual reports showcasing commitments to Environmental, Social and Governance (ESG) values, including Business Responsibility and Sustainability Reporting (BRSR) in line with SEBI's mandate for top 1,000 listed entities. Its renewable energy subsidiary claimed reductions in carbon emissions, while its logistics arm spoke of gender diversity in employment and its financial services subsidiary highlighted financial inclusion efforts. On the surface, the Company appeared as a model of corporate citizen, aligning itself with CSR activities, spending over ₹ 50 crore annually on education, sanitation, and rural infrastructure projects. DIL also declared its adoption of the "Integrated Reporting" framework, in accordance with international standards. Analysts praised DIL's meteoric rise, its issuance of green bonds and its consistent dividend policy. Shareholders received assurances that governance structures were strong and regulators accepted its disclosures as adequate. However, beneath the surface, tensions were growing, whistleblower complaints pointed to irregularities in awarding EPC contracts to related entities, statutory auditors raised concerns about inadequate internal controls and minority shareholders questioned the opaque decision-making process. Environmental activists highlighted that DIL's mining and infrastructure projects had caused large-scale deforestation, violating environmental clearances and that disclosures in the BRSR report were selective rather than comprehensive. Moreover, global ESG rating agencies downgraded DIL's governance scores citing weak board independence and poor disclosure practices. The unravelling began in 2024, when an investigative journalist exposed that DIL had overstated its renewable energy achievements in its sustainability report. An independent review found that only 40% of claimed solar capacity was functional, with the rest being under litigation or awaiting approvals. SEBI initiated an inquiry under SEBI (LODR), examining misstatements in annual reports. At the same time, the Ministry of Corporate Affairs received complaints alleging siphoning of funds through related party transactions with shell companies controlled by relatives of promoter directors. The independent directors, instead of exercising their duties, remained passive, leading to questions about their effectiveness. Further, CSR funds, which were supposed to be spent on rural education were allegedly diverted to trusts managed by the promoters. Institutional investors, guided by proxy advisory firms, began voting against board resolutions, citing poor governance practices. The situation worsened when a tragic accident at one of DIL's construction sites killed 14 contract workers, revealing lapses in occupational health and safety standards. NGOs alleged violation of SDG 8 (Decent Work) and ESG social safeguards, which directly contradicted DIL's sustainability commitments. Media backlash and social media activism damaged DIL's reputation, causing a 35% fall in its share price within weeks. Credit rating agencies downgraded its debt citing governance risks and banks tightened lending norms. The Board was accused of non-compliance with provisions relating to performance evaluation of independent directors. In response, the Board announced separation of the roles of Chairperson and CEO (in line with SEBI recommendations), reconstitution of the Audit Committee with truly independent experts and appointment of a Big 4 firm to conduct a sustainability audit. Yet, damage had been done, foreign investors withdrew funds, retail shareholders filed class-action suits under the Companies Act and regulators-imposed penalties. While the Company had complied with structural mandates such as appointing independent directors, forming committees, and disclosing CSR spends, it failed to internalize the spirit of accountability, transparency, fairness, and responsibility. In the background of above facts, answer the following questions: Examine how weak risk management contributed to crisis at DIL and recommend steps to strengthen the risk framework.