e-Form BEN-2 filed with delay of over 527 days: MCA imposes Penalty

Registrar of Companies (RoC), Uttar Pradesh, issued an order adjudicating penalties on GENONE Optech Private Limited for non-compliance with Section 90 of the Companies Act, 2013, related to significant beneficial ownership (SBO). The company, incorporated in 2019, delayed filing the required e-Form BEN-2 for over 527 days despite a declaration of significant beneficial ownership made in January 2019. A show-cause notice was issued in May 2022, but no response or representation was made during the hearing. The company cited reasons such as lack of coordination, COVID-19 disruptions, and delays in seeking professional advice but eventually filed the e-form in June 2022.

The adjudicating officer imposed a cumulative penalty of ₹6,63,500, distributed among the company and its directors. The penalty includes ₹3,63,500 for the company and ₹1,00,000 each for three directors, considering a daily fine from December 2020 until compliance. The company has 90 days to pay the penalty or appeal to the Regional Director, Ministry of Corporate Affairs, within 60 days. This order underscores the importance of timely compliance with SBO regulations to avoid significant penalties.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF
COMPANIES, Uttar Pradesh
37/17, Westcott Building, The Mall,
Kanpur — 208001 (U.P.)
Phone : 0512 — 2310443/2310227

Order No. 03/20/SBO/UP/2024/GENONE Dated: Dated : 2024

ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF PROVISONS OF SECTION 90 OF THE COMPANIES ACT, 2013 .

IN THE MATTER OF GENONE OPTECH PRIVATE LIMITED
(CIN: U74999UP2016PTC088215)

Date of hearing: 08.05.2024

Present on behalf of Company and its Applicants: No one appeared on the date of hearing on 08.05.2024.

The Ministry of Corporate Affairs vide its gazette notification no A-42011/112/2014-Ad.II dated 24.3.2015, has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

1. Whereas the company viz. GENONE OPTECH PRIVATE LIMITED (herein after known as the ‘reporting company’) has been incorporated on 30.05.2019 and having its registered office as per MCA21 Register address at “F 1 ” Plot No – 1, Ground Floor, Ecotech Vii„ Industrial Park, Kasna, Greater Noida, Uttar Pradesh,201308,India.The authorized capital of the company is Rs. 260,000,000.00.

2. The shareholding details of ‘the reporting company’ as per list of shareholders attached to e-form MGT-7 for FY 2019-2020 is as follows: –

3. Provisions of the Companies Act,2013

That the provisions of Section 90 of the Companies Act, 2013 reads:-

Section 90:- (1) Every individual, who acting alone or together, or through one or more persons or trust, including a trust and persons resident outside India, holds beneficial interests, of not less than twenty-five per cent. or such other percentage as may be prescribed, in shares of a company or the right to exercise, or the actual exercising of significant influence or control as defined in clause (27) of section 2, over the company (herein referred to as “significant beneficial owner’), shall make a declaration to the company, specifying the nature of his interest and other particulars, in such manner and within such period of acquisition of the beneficial interest or rights and any change thereof, as may be prescribed:

Provided that the Central Government may prescribe a class or classes of persons who shall not be required to make declaration under this sub-section.

(2) Every company shall maintain a register of the interest declared by individuals under sub-section (1) and changes therein which shall include the name of individual, his date of birth, address, details of ownership in the company and such other details as may be prescribed.

(3) The register maintained under sub-section (2) shall be open to inspection by any member of the company on payment of such fees as may be prescribed.

(4) Every company shall file a return of significant beneficial owners of the company and changes therein with the Registrar containing names, addresses and other details as may be prescribed within such time, in such form and manner as may be prescribed.

(4A) Every company shall take necessary steps to identify an individual who is a significant beneficial owner in relation to the company and require him to comply with the provisions of this section.

(5) A company shall give notice, in the prescribed manner, to any person (whether or not a member of the company) whom the company knows or has reasonable cause to believe—

a. to be a significant beneficial owner of the company;

b. to be having knowledge of the identity of a significant beneficial owner or another person likely to have such knowledge; or

c. to have been a significant beneficial owner of the company at any time during the three years immediately preceding the date on which the notice is issued, and who is not registered as a significant beneficial owner with the company as required under this section.

(6) The information required by the notice under sub-section (5) shall be given by the concerned person within a period not exceeding thirty days of the date of the notice.

(7) The company shall—

a. where that person fails to give the company the information required by the notice within the time specified therein; or

b. where the information given is not satisfactory, apply to the Tribunal within a period of fifteen days of the expiry of the period specified in the notice, for an order directing that the shares in question be subject to restrictions with regard to transfer of interest, suspension of all rights attached to the shares and such other matters as may be prescribed.

(8) On any application made under sub-section (7), the Tribunal may, after giving an opportunity of being heard to the parties concerned, make such order restricting the rights attached with the shares within a period of sixty days of receipt of application or such other period as may be prescribed.

(9) The company or the person aggrieved by the order of the Tribunal may make an application to the Tribunal for relaxation or lifting of the restrictions placed under sub-section (8), within a period of one year from the date of such order:

Provided that if no such application has been filed within a period of one year from the date of the order under sub-section (8), such shares shall be transferred, without any restrictions, to the authority constituted under sub-section (5) of section 125, in such manner as may be prescribed; (9A) The Central Government may make rules for the purposes of this section.

(10) If any person fails to make a declaration as required under sub-section (1), he shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of one thousand rupees for each day after the first during which such failure continues, subject to a maximum of two lakh rupees.

(11) If a company, required to maintain register under sub-section (2) and file the information under sub-section (4) or required to take necessary steps under sub-section (4A), fails to do so or denies inspection as provided therein, the company shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day, after the first during which such failure continues, subject to a maximum of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of twenty-five thousand rupees and in case of continuing failure, with a further penalty of two hundred rupees for each day, after the first during which such failure continues, subject to a maximum of one lakh rupees.

(12) If any person willfully furnishes any false or incorrect information or suppresses any material information of which he is aware in the declaration made under this section, he shall be liable to action under Section 447.

(i) That Section 2(27) of the Act defines ‘control’:

“control” shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner.

That Section 2(1) of theCompanies (Significant Beneficial Owners) Rules, 2018 of the Act defines `significant influence’ as the power to participate, directly or indirectly, in the financial and operating policy decisions of the reporting company but is not control or joint control of those policies.

4. It is pertinent to mention herein that show cause notice dated 20.05.2022 was issued to the company and its directors during the course of Inquiry wherein clarification regarding significant beneficial ownership was sought. The reporting company replied vide letter dated 04.06.2022 stating that “The Company has failed to file e-Form BEN-2 in respect of Smart Vision Singapore Pte Ltd (Beneficial Owner —Mr. Wang Zhiming) holds 99.99% shares of the company w. e..1 04-09-2019. The Company had filed all due e-forms from time to time. However, the Company had failed to file Form Ben-2 in time. This irregularity happened due to lack of coordination between directors, the Covid19 situation, and change in Directors. This error was not made intentionally but due to seeking professional advice at that point of time. Now the Company has filed the E-form for BEN-2 dated 02.06.2022 vide SRN No. – F03922267& Paid Rs. 7800/- as fee of Challan. “

Thereafter, Inquiry report under Section 208 of the Companies Act, 2013 was submitted to the Directorate on 04.08.2022.

5. The reporting company is a wholly owned subsidiary of SMART VISION SINGAPORE PTE LTD (“Smart Vision”) and had filed BEN-2 on 02.06.2022. On examination of the e-form it was found that the declaration made in BEN-1 was given on 05.01.2019 by the Significant beneficial owner but the reporting Company had filed the e-form BEN-2 on 02.06.2022 vide SRN F03922267.Even though the company had made the compliance but there was a delay in filing of the e-form BEN-2 from 05.01.2019 to 01.06.2022 .This being the reason for issuance of Show-cause notice to the Reporting company for non-compliance of Section 90 of the Companies Act, 2013 and the same was issued vide letter dated 24.04.2024 and a date of hearing was fixed on 08.05.2024. The reporting company did not submit its reply on the matter, and no one appeared on behalf of the company and its directors on the date of hearing.

6. Adjudication of Penalty:

Taking into consideration the above facts and the filings made in the MCA21 Registry by the reporting Company and the delay in filing of e-form BEN-2 it is concluded that the default u/s 90 r/w SBO Rules under the Companies Act, 2013, for delayed filing stands established. The default period is counted from the date of decriminalization of default w.e.f. 21.12.2020 till 01.06.2022 as the e-form BEN-2 was filed on 02.06.2022 for violation of Section 90 (4) r/w SBO Rules made thereunder and the default period is for 527 days.

A. Calculation of Penalty imposed for violation of Section 90 r/w SBO Rules made there under of the Companies Act, 2013:-

7. The Noticee shall pay the amount of penalty by way of e-payment [available on Ministry website mca.gov.in] under “Pay miscellaneous fees” category in MCA fee and payment Services within 90 days of receipt of this order and intimate this office with proof of penalty paid .

8. Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodi Road, New Delhi, within a period of sixty days from the date of receipt of this order, in Form ADJ setting forth the grounds of appeal and shall be accompanied by a certified copy of this order. [Section 454(5) & 454(6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014].

9. In case appeal is made, 0/o the Registrar of Companies, U.P may be informed alongwith the penalty imposed and the payments made. Attention is also invited to Section 454(8) of the Companies Act, 2013, in the event of non-compliance of this order.

(Seema Rath)
Registrar of Companies & Adjudicating Officer
Uttar Pradesh, Kanpur.

03/20/SBO/UP/2024/GENONE /3796 to 3799

Dated : 20/09/2024