MCA KYC Drive

•          In this year MCA has started a KYC drive in a lot of areas

              (1)KYC of Director – DIR 3 KYC

              (2)To find our outstanding to MSME-1

              (3)To find our deposit compliance –DPT 3

•        In DPT 3 Companies were required to identify all the advance or loan received by them on or after 1^st April, 2014 and outstanding as on 22 January 2019.

•       Idea was to check whether the companies have been complying with Companies (Acceptance of Deposit) Rules as on 22 January 2019. This data was required to be uploaded on MCA in e-form DPT -3 by 21 April 2019.

•      Again similar data was required to be uploaded on MCA as at 31^st March, 2019 by 30 June 2019.However relevant e-form DPT-3 was not made available till date.

•      Again similar data was required to be uploaded on MCA as at 31^st March, 2019 by 30 June 2019. However relevant e-form DPT-3 was not made available till date.

•     Now, MCA has notified that, data as at 22 January, 2019 is not required to be uploaded and only data as 31 March, 2019 will be required. Further after relevant e form is made available, within 30 days of that the form will have to be uploaded.

•      DPT-3 form was notified on 22.01.2019, and data wrt deposit as at 22.01.2019 was asked for.

•      Probably idea was to not allow companies to manipulate books and therefore data as at  22.01.2019.

•      However since e- form DPT -3 could not be deployed before due date, MCA has to drop the idea of collating data as at 22.01.2019.

•     Further , MCA has been postponing such dates for e-forms in past  e.g. for form BEN1&2( Significant Beneficial Ownership Disclosure )e form MSME 1 etc. And now what remains to be extended is Annual Return which Auditor has to be file under National Financial Reporting Authority (NFRA) Rules.

•         http://www.mca.gov.in/Ministry/pdf/CircularDPT-3Form_12042019.pdf

• In this year  MCA has started a lot of KYC drive like -

• KYC of director - DIR 3 KYC
• To find our outstanding to MSME, - MSME 1
• To find our deposit compliance - DPT3.
• Idea is to strengthen disclosures and ensure compliance of laws. DPT3 form was notified on 22 January 2019, and data wrt deposit as at 22.1.2019 was asked for.
• Probably idea was to not to allow companies to manipulate books and therefore data as at 22.01.2019 was asked by same day notification. 
• However since e form DPT3 could not be deployed before due date, MCA has to drop the idea of collating data as at 22.01.2019.

http://www.mca.gov.in/Ministry/pdf/CircularDPT-3Form_12042019.pdf

Sun Pharma`s senior executives wife settles Insider Trading case with SEBI

• Abhay Arvind Gandhi (who was during the period under review CEO of Sun Pharma Laboratories Ltd a WOS of Sun Pharmaceutical Industries Ltd) and his wife traded in Ranbaxy shares soon after Japanese major Daiichi in 2014 agreed to sell Ranbaxy to Sun Pharma.
• The proposed deal was Unpublished Price Sensitive Information (UPSI) from Feb 14, 2014 to 6^th April, 2014.
• By trading in shares of Ranbaxy during the UPSI period both violated PIT norms. 
• The settlement amount of Rs 35.06 lakh each was approved by a panel of SEBI's Whole Time Members.
• The trend that we can see from Settlement Orders and Adjudication Orders passed by SEBI with respect to Prohibition of Insider Trading , is that whenever there is takeover or potential takeover transactions, SEBI has gone in detail about transactions done by key people in  the respective Companies.
• Under amended PIT regulations (effective from 1 April 2019), every listed Company has to maintain digital database whenever UPSI is shared. And conduct enquiry about any leak or suspected leak of UPSI. 
• Had this incident taken place after 1 April 2019, SUN Pharma would have required to conduct an internal inquiry about suspected leak of UPSI and submit a report to SEBI.

https://www.sebi.gov.in/enforcement/orders/apr-2019/settlement-order-dated-april-11-2019-in-respect-of-kiran-abhay-gandhi-in-the-matter-of-trading-activities-of-certain-entities-in-the-scrip-of-ranbaxy-laboratories-limited_42688.html

https://www.sebi.gov.in/enforcement/orders/apr-2019/settlement-order-dated-april-11-2019-in-respect-of-abhay-arvind-gandhi-in-the-matter-of-trading-activities-of-certain-entities-in-the-scrip-of-ranbaxy-laboratories-limited_42687.html

  

In the matter of Shri Balaji Cycles Private Limited (1^st Appellant) and Shri Suresh Kumar Sharma (2^nd Appellant) Versus The Registrar of Companies (Respondent)

• Applicant Company was incorporated on 30.04.1997
• The Company failed to file statutory documents viz. Annual Return and Balance Sheet as per section159/220 of the Companies Act,1956.
• The Company was struck off by the Registrar of Companies (hereinafter referred to as ROC) vide official Gazette Notification dated 23.06.2007.
• The applicant filed the application with National Company Law Tribunal (hereinafter referred to as NCLT) for restoration of company after almost a decade.
• ROC objected the restoration on the following grounds:
• Company to provide strict proof showing that the company is carrying on business since inception by providing proof such as submitting of income tax returns, viability of running the company, composition of Board of Directors, shareholders, creditors and their consents thereof for the present application for restoration.
• The applicant replied that the company did not receive any show cause notice from ROC for strike off and property adjacent to the appellant has somehow colluded with the postman to prevent any correspondence from reaching the applicant and applicant only came to know about the name of the appellant being struck off only in 2017 and various other reasons such as illness of the directors, paucity of funds etc.
• Despite providing opportunity, the company failed to provide Income Tax Returns and placed on record the true copy of the audited Balance Sheet and Profit & loss Account only for the financial year ending on 31.03.2016.
• Drawing adverse inference – NCLT dismissed the application.
• Aggrieved by the order of NCLT, Applicants filed the application for restoration of company with the Appellant Tribunal.
• During the pendency of application, the company paid the lease rentals to HSID and the same was provided as an additional proof for restoration.
• Appellate Tribunal quashing the applicant reply stated that though the consent of shareholders and creditors is received, the same cannot be considered for this case as they are family members. Further the lease rentals have been deposited only after when the NCLT asked for proof and hence the same cannot be taken a good ground to assert that the company has already been in business or in operation.
• NCLAT also dismissed the application as the appeal has no merits.

New Initiatives: Investor Complaint E-form

In our earlier newsletter dated 5^th December 2018, we had discussed about Serious Complaint Form (SCP) which dealt with reporting of serious complaints against a company by filing it on MCA

The Ministry of Corporate Affairs (MCA) has now introduced e-form ICP (Investor complaint eForm).http://www.mca.gov.in/MinistryV2/companyformsdownload.html 

The form was introduced for reporting complaint related to shares, debentures, bonds, fixed deposits, etc. against a company/LLP by filing it on MCA. This is an additional facility to lodge compliant other than handing over a written complaint directly to MCA official in the office of Registrar of Companies.

However, complaints related to complaint/grievances of Non-Banking Finance Company (NBFC), Residuary Non-Banking Company (RNBC) registered with RBI have to be filed with RBI.

Listed companies and also the companies which intend to get their securities listed on any recognized stock exchange can file their complaints related to issue and transfer of securities and non-payment of dividend with SEBI. Other complaints can be filed with MCA.

Chit fund companies and real estate companies can file their complaints with the concerned regulatory authority

Who can file a complaint?

• Shareholder
•  Investor
• Creditor
• Employee (It is unclear why ‘employee’ category is appearing in this form)
•  Deposit holders
•  Others (who do not belong to the above categories)

An illustrative list of Circumstances in which Compliant can be lodged is as under:       

• Complaints relating to non-receipt of various certificates w.r.t. shares, debentures, bonds
• Non-receipt of bonus shares, offer for the right shares, notice for call money, share application money, dividend warrant, etc
•    Non-receipt of interest w.r.t. debentures, bonds and fixed depositsNon- receipt of Redemption amount
• Non-receipt of payment as per Company Law Board (CLB) order
• Non-receipt of Pre-matured payments and matured amount of fixed deposits
• Non-receipt of Annual Report and registration of change in address and other miscellaneous complaints

For details, you can visit http://www.mca.gov.in/MinistryV2/companyformsdownload.html

No fee is prescribed for this form. Further, unlike other forms to be filed on MCA, there is no requirement of having Digital Signature Certificate (DSC). Once the form is filed, an acknowledgment email is sent to the complainant on the email id mentioned in the form

Do you know - anybody can file online complaint against Company?

The Ministry of Corporate Affairs (MCA) has e-form SCP (Serious complaint eForm). The form was introduced for reporting the serious complaints against a company by filing it on MCA. This is an additional facility to lodge compliant other than handing over a written complaint directly to MCA official in the office of Registrar of Companies.

Who can file a complaint?

• Shareholder
• Investor
• Creditor
• Employee
• Deposit holders
• Others (person who do not belong to above categories)

 Circumstances in which Compliant can be lodged are as under: 

•  Cessation of Director
•  Removal of Director
• Management Dispute
• Financial Mismanagement
• Corporate Fraud
• Accounting Fraud
• Oppression of Minority Shareholder
• Others

No fee is prescribed for this form. Further, unlike other forms to be filed on MCA, there is no requirement of having Digital Signature Certificate (DSC).  Once the form is filed, an acknowledgment email is sent to the complainant on the email id mentioned in the form. 

Do you know charge cannot be registered after 120 days?

Highlights on the Companies Amendment (Ordinance), 2018 were circulated by our newsletter dated 5 November 2018. Out of those, one of the significant amendments is related to Charges which is discussed in this article.

Different scenario w.r.t. Creation/Modification of Charges is presented in tables below.

  Charges created/ modified Before 2 November, 2018

Sr. No.	Particulars	Fees
1.	Registration of charges within 30 days of such creation or modification	Normal Fees
2.	Registration of charges after 30 days but within 300 (30+270) days of such creation or modification	Normal Fees + additional Fees
3.	Registration of charges after 300 days of such creation or modification – to be registered within 6 months from 2 November, 2018	Normal Fees + additional Fees

Charges created/ modified after 2 November, 2018

Sr. No.	Particulars	Fees
1.	Registration of charges within 30 days of such creation or modification	Normal Fees
2.	Registration of charges after 30 days but within 60 (30+30) days of such creation or modification	Normal Fees + additional Fees
3.	Registration of charges after 60 days of such creation or modification but within 120 days such creation or modification	Normal Fees + additional Fees + Ad valorem fees
4.	Charge cannot be registered after 120 days*

* Omission/Mis-statement in the Charge created or modified can be registered after 120 days subject to Condonation of Delay

 Other Key points to be pointed:

ü    Unregistered charges are treated as unsecured

ü  In case of willful  furnish  of  false  or  incorrect  information  or knowingly  suppressing  any  material information liable  to  fraud  and attract action under Section 447