ROC imposed penalty on a company for contravention of Section 90(4A) and Section 90(5) of the Companies Act, 2013

 

Registrar of Companies (“ROC”), Gujrat, Dadra and Nagar Haveli vide order dated 29th July, 2024 imposed penalty on IKSHU Infrastructure Private Limited (“Company”) for contravention of Section 90(4A) and Section 90(5) of the Companies Act, 2013 (“the Act”).

Facts and findings of ROC:

On verification of the shareholding pattern of the Company on the of the Annual Return/ Balance Sheet for the Financial Year 2018-19 to 2022-23., ROC found that the shareholders are body corporates who holds more than 10% shares in the Company.

ROC issued notice to the Company under Section 206(1) of the Act for non-filing of form BEN-2 as required under Section 90 of the Act.

The Company submitted its reply stating that “I humbly submit that we are currently in the process of collecting all the documents from our shareholders…. Further, we will comply with Section 90 of the Companies Act, 2013 once we are able to get all of the required documents.” [Point 6(ii)(a) of the ROC order]

The reply of the Company revealed that the Company did not take necessary steps to identify an individual who is SBO (Significant Beneficial Owner) in related to the body corporates holding shares in the Company and the efforts of the Company under Section 90(4A) and Section 90(5) of the Act is inadequate. The Company has failed to exercise necessary due-diligence to ascertain the SBOs in terms of the provisions of Section 90 of the Act read with Rule 2(2A) of Companies (Significant Beneficial Ownership) Rules (‘the Rules’).

ROC further held that the onus is on the Company at the first instance to serve notice in form BEN-4 to all body corporate members other than individuals who holds not less than 10% shares or voting right to participate in dividend irrespective of the fact as to whether there is an SBO or not as per Rule 2(2A) of the Rules. The Company has failed to discharge its obligations under Section 90(5) of the Act read with Rules made thereunder.

Imposition of penalty and period of default:

ROC imposed penalty on the Company and its Directors under Section 90(11) of the Act for contravention of Section 90(4A) and the period of default is from 15th August, 2019 [on which Companies (Amendment) Act, 2019 became effective] till 8th April, 2024.

Further, ROC imposed penalty on the Company and its Directors under Section 450 of the Act for contravention of Section 90(5) of the Act and the period of default is from 13th June, 2018 [on which Companies (Amendment) Act, 2017 became effective] till 8th April, 2024.

The copy of the order is as under:

1724474506255