Not opening separate Bank Account for private placement of Fund: ROC imposed fine of Rs. 5 Lakh
The ROC, Chennai has imposed a penalty of ₹5 lakh on a company and its directors for not opening a “separate bank account” for private placement funds, as required under section 42(6) of the companies act, 2013.
Company stated the reason for non-compliance was due to oversight, lack of awareness, and absence of professional guidance.
It was in the case of M/S. GALAXEYE SPACE SOLUTIONS PVT. LTD. (The Company) Suo moto filed an adjudication application, admitting it did not open a separate bank account for private placement funds as required under Section 42(6), and instead used its existing business account for the securities allotment.
ROC imposed a penalty of ₹ 2 lakh on the company and ₹ 3 Lakh on its directors of the company.
The ROC Order Copy is attached herewith for reference.
The copy of the advisory is as under:
