The subject company and its officers who have made the default in conducting Board Meeting with delay of 54 days (i.e from 08.07.2022 to 31.08.2022) are now liable for penalties under section under section 450 of the Act, 2013.
b. The subject company is the subsidiary company of its foreign holding company namely Riot Games Limited which holds 99.99% of shares in the company. Therefore, the subject company does not get covered under the purview of small company as defined u/s 2(85) of the Companies Act, 2013. Hence, the benefit of section 446B would not be applicable on the company.
c. Now in exercise of the powers conferred on the undersigned vide Notification dated 24th March, 2015 and having considered the reply submitted by the subject company (through its authorized representative) in response to the notice issued vide No ROC/D/Adj/2022/Section 173/Riot Games/182-186 dated 17.01.2023, hereby impose the penalty on the company and its officers in default under section 450 of the Act, for violation of section 173(1) of the Companies Act, 2013.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS,
OFFICE OF REGISTRAR OF COMPANIES,
NCT OF DELHI & HARYANA
4TH FLOOR, IFCI TOWER, 61, NEHRU PLACE,
NEW DELHI -110019
Order No. ROC/D/Adj/2022/Section 118/ Riot Games/ 504-589 Date: 13.02.2023
Order for Penalty for Violation of Section 173 (1) of the Companies Act, 2013
IN THE MATTER OF
RIOT GAMES PRIVATE LIMITED
(CIN: U72900HR2017FTC070208)
Adjudication in respect of violation of Companies Act, 2013
1. Appointment of Adjudicating Officer: –
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014- Ad.11, dated 24.03.2015 appointed Registrar of Companies, NCT of Delhi & Haryana as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter known as Act) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company viz. Riot Games Private Limited (herein after known as `company’) is a registered company with this office under the provisions of section 7 of the Companies Act, 2013 having its registered office as per MCA21 Registry at address Regus Business Center, Al Tower, Sector 49 Level 9, Spaze I, Tech Park Gurugram Gurgaon HR 122018 IN. The financial & other details of the subject company for immediately preceding F.Y. as available on MCA-21 portal is stated as under:
| S. No. | Particulars | Details |
| 1. | Paid up capital | Rs. 10,00,000 |
| 2. | Turnover (F.Y. 2021-22)
a. Revenue from operation |
Rs. 97,16,000 |
| b. Other Income | NIL | |
| 3. | Holding Company | Yes |
| 4. | Subsidiary Company | NIL |
| 5. | Whether company registered under Section 8 of the Act? | No |
| 6. | Whether company registered under any other special Act? | No |
3. Facts about the Case: –
I. The Company suo-moto filed an application vide SRN-F51881126 dated 06.12.2022 for adjudication of penalty under the provisions of section 454 of the Act and rules thereunder and inter alia stated that: –
‘Since, the company is in process of appointing new directors on board therefore the existing the Board of Directors were not available due to certain decision pending at senior level. Resulting to this, the Board encountered a difficulty in convening a board meeting within the stipulated timeline.’
II. The subject company conducted its first Board Meeting for the calendar year 2022 on 10th March 2022 through video conferencing and next board meeting was to be held on 7th July 2022. (i.e within 120 days from the date of previous Board meeting) but it was held on 31st August 2022. Hence, the subject company has made default pursuant to section 173 (1) of the Companies Act, 2013 in conducting Board Meeting with delay of 54 days (i.e from 08.07.2022 to 08.2022).
III. In terms of the provisions of section 173(1) r/w 454 of the Companies Act, 2013, this office had issued Show Cause Notices (SCN) vide letter no. ROC/D/Adj/2022/Section 173/Riot Games/182-186 dated 17.01.2023 to the Company and officers in default.
IV. In response to the SCN dated 17.01.2023, the subject company (through its authorized representative) submitted its reply vide letter dated 27.01.2023 and has inter-alia stated that‑
“Non- compliance was purely unintentional and inadvertent in nature. The aforesaid contravention of section 173 (1) of the Companies Act, 2013 was without any malafide motive and it was unintentional and not committed wilfully. The applicants and the company have not directly or indirectly benefited from the unintentional default that was committed.”
4. The relevant provision of section 173 as on date of default are as under:
Section 173 (Meetings of Board)
(1) Every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board:
Provided that the Central Government may, by notification, direct that the provisions of this sub-section shall not apply in relation to any class or description of companies or shall apply subject to such exceptions, modifications or conditions as may be specified in the notification.”
5. The relevant provision of 450 sections as on date of default are as under:
“If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person.”
6. Adjudication of penalty: –
a. The subject company and its officers who have made the default in conducting Board Meeting with delay of 54 days (i.e from 08.07.2022 to 31.08.2022) are now liable for penalties under section under section 450 of the Act, 2013.
b. The subject company is the subsidiary company of its foreign holding company namely Riot Games Limited which holds 99.99% of shares in the company. Therefore, the subject company does not get covered under the purview of small company as defined u/s 2(85) of the Companies Act, 2013. Hence, the benefit of section 446B would not be applicable on the company.
c. Now in exercise of the powers conferred on the undersigned vide Notification dated 24th March, 2015 and having considered the reply submitted by the subject company (through its authorized representative) in response to the notice issued vide No ROC/D/Adj/2022/Section 173/Riot Games/182-186 dated 17.01.2023, hereby impose the penalty on the company and its officers in default under section 450 of the Act, for violation of section 173(1) of the Companies Act, 2013 which are as follows:-
|
Violation section |
Penalty imposed on company/ Officers | No. of days of default |
Calculation for penalty amount | Maximum penalty can be imposed u/s 450 of the Act, 2013 |
| A | B | C | D | E |
| Under section 173 (1) of the companies Act, 2013 | Riot Games Private Limited | 54 days* | 10000 + 54000= 64000 | 64,000 |
| Sukamal Pegu (Director) | 54 days | 10000 + 54000= 64000 | 50,000 | |
| All Burak Muslumanoglu (Director) | 54 days | 10000 + 54000= 64000 | 50,000 | |
| Vidushi Singh (Director) | 54 days | 10000 + 54000= 64000 | 50,000 |
*No. of days have been calculated from 08.07.2022 to 31.08.2022.
7. Order:
a. Names of party as mentioned in the table above are hereby directed to pay the penalty amount as per column no. ‘E’ therein. In case of parties other than company, such amount is required to be paid out of their own funds.
b. The said amount of penalty through online by using the website mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, payable at Delhi, within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
c. Appeal against this order may be filed with the Regional Director (NR), Ministry of Corporate Affairs, B-2 Wing, 2nd Floor, Paryavaran Bhawan, CGO Complex, Lodhi Road, New Delhi-110003 within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website mca.gov.in] setting forth the grounds of appeal and shall be accompanied by a certified copy of the order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].
d. Your attention is also invited to section 454(8) of the Act in the event of noncompliance of this order.
Place: New Delhi.
Date: 13/02/2023
(Prany Chaturvedi, lcLs)
(Adjudicating Officer)
Registrar of Companies,
NCT of Delhi & Haryana
