No separate bank account for private placement of funds – ROC imposed penalty of Rs. 30 Lakh.
Recently, ROC imposed penalty of Rs. 30 Lakh as separate bank account was not opened for private placement of funds –.
The Company Contention:
Default is technical & unintentional in nature. The company is engaged in the business of securities broking, which is a capital-intensive industry with strict payment deadlines. This was the main reason the company was unable to open separate bank accounts.
Key Highlights:
In the matter of M/S. SHRENI SHARES LIMITED, a Suo motu adjudication application was filed, admitting the following:
1. The entire funds were received from promoters only; no external investors were involved, and hence, no third-party interests were adversely affected.
2. The issue was intended to be a rights issue, but was inadvertently framed as a private placement, which was neither required nor intended.
- THE COMPANY DID NOT HAVE A WHOLE-TIME COMPANY SECRETARY AT THE RELEVANT TIME.ROC imposed a penalty of ₹26 lakh on the company and ₹4 Lakh on its directors of the company.
CONLCUSION:
THE ROC MUMBAI HAS IMPOSED A PENALTY OF ₹ 30 LAKH ON A COMPANY & ITS DIRECTORS FOR NOT OPENING A “Separate Bank Account” FOR PRIVATE PLACEMENT FUNDS, AS REQ UNDER SEC 42(6) OF THE COMPANIES ACT 2013.
The Order Copy is attached herewith for reference.
The copy of the order is as under:
