MCA Penalizes SBO, Company & Director for 1636-Day Delay in BEN-2 Filing

Ministry of Corporate Affairs has issued an adjudication order against Astrum Stamping Private Limited for failing to file Form BEN-2, which records significant beneficial owners, within the required timeframe. The company delayed the filing for 1,636 days, missing the deadline specified by the Companies Act, 2013. This non-compliance led to penalties under Sections 90(4A) and 90(7) of the Act, which govern the disclosure of significant beneficial ownership and the company’s responsibility to report such details to the Registrar. The delay was attributed to issues in obtaining necessary information from its significant beneficial owners. Despite efforts to comply, including filing the form on February 29, 2024, after repeated notices and extensions, the company and its directors were found in default. The adjudicating authority has mandated penalties for both the company and its directors due to their continued non-compliance and delays in submitting required documentation.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES, TAMIL NADU, ANDAMAN & NICOBAR ISLANDS, CHENNAI
II FLOOR, C- WING, SHASTRI BHAVAN, 26, HADDOWS ROAD, NUNGAMBAKKAM, CHENNAI- 6

F.NO.ROC/CHN/ASTRUM STAMPING/ADJ/S.90/2024 DATE: 23 AUG 2024

ADJUDICATION ORDER UNDER SECTION 90 OF THE COMPANIES ACT, 2013
IN THE MATTER OF M/S. ASTRUM STAMPING PRIVATE LIMITED

1. Appointment of Adjudicating Officer: –

The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 has appointed Registrar of Companies, Chennai as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter referred as Act or Companies Act, 2013) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

2. Company: –

Whereas the company viz M/s. Astrum Stamping Private Limited with CIN: U28100TN2018PTC126616 (herein after referred as company or ‘subject company’) is a registered company with this office under the Companies Act, 2013 having its registered office as per MCA21 Registry at Polivakkam Chatram, Polivakkam P.0, Thiruvallur Taluk, Thiruvallur, Polivakkam, Tamil Nadu, India, 602002. The financial & other details of the subject company as available on MCA-21 portal is stated as under:

3. Directors/KMP during the period of violation

4. List of Shareholders as on March 31, 2023

5. Section and Penal Provision as per Companies Act, 2013

Section 90 of the Companies Act, 2013- Register of significant beneficial owners in a company:

(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.

(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.

(4,4)* 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.

Inserted by the Companies (Amendment)Act,2019 w.e.f 15.08.2019

(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.

(10) If any person fails to make a declaration as required under sub-section (I), he shall be liable to a penalty of fifi^–y 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.

(11) If any person wilfully 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.

*Rule 3 of the Companies (Significant Beneficial Owners) Rules,2018 :Declaration of Significant Beneficial Ownership under Section 90 :

(1) On the date of commencement of the Companies (Significant Beneficial Owners) Amendment Rules, 2019, every individual who is a significant beneficial owner in a reporting company, shall file a declaration in Form No. BEN-1 to the reporting company within ninety days from such commencement.

(2) Every individual, who subsequently becomes a significant beneficial owner, or where his significant beneficial ownership undergoes any change shall file a declaration in Form No. BEN-1 to the reporting company, within thirty days of acquiring such significant beneficial ownership or any change therein.

*Substituted by the Companies (Significant Beneficial Owners) Amendment Rules, 2019, w.e.f 08.02.2019 Rule 4 of the Companies (Significant Beneficial Owners) Rules,2018-Return of significant beneficial owners hi shares:

Upon receipt of declaration under rule 3, the reporting company shall file a return in Fain) No. BEN-2 with the Registrar in respect of such declaration, within a period of thirty days from the date of receipt of such declaration by14 along with the fees as prescribed in Companies (Registration offices and fees) Rules, 2014.

Rule 7 of the Companies (Significant Beneficial Owners) Rules,2018-.Application to the Tribunal:

7 The reporting company shall apply to the Tribunal,

(i) where any person fails to give the information required by the notice in Form No. BEN-4, within the time specified therein; or

(ii) where the information given is not satisfactory, in accordance with sub-section (7) of Section 90, for order directing that the shares in question be subject to restrictions, including

(a) restrictions on the transfer of interest attached to the shares in question;

(b) suspension of the right to receive dividend or any other distribution in relation to the shares in question;

(c) suspension of voting rights in relation to the shares in question;

(d) any other restriction on all or any of the rights attached with the shares in question

6. Facts of the Case

A notice was issued to the subject company under Section 206(1) of the Companies Act, 2013 on 07.02.2024 to ascertain compliance of Section 90 of the Companies Act,2013 and rules made thereunder. In reply. Mr. Ramakrishnan Dharanikumar, director of the company vide letter dated 22.02.2024 informed that the company was initially incorporate as a wholly owned subsidiary of Stellar Plastics (India) Private Limited Company. Further, submitted that based on the perusal of shareholding pattern of the holding company there were no significant Beneficial Owner and hence the requirement for filing of Form BEN-2 did not arise as on the date of notification of Companies (Significant Beneficial Owners) Amendment Rules, 2019 (Rules)”. After the notification of the Rules, shares were allotted to two body corporates namely YUHAN PRECISION CO. LTD and YH PRECISION(M) SDN.BHD on 09.07.2019 & 20.07. 2019.As a result, the said body corporates hold 15% of Equity share capital of the company. Further, the company sent declarations in Form BEN-4 to the respective companies on July 23,2019 and company has filed e-form BEN-2 vide SRN: F92531110. After that ROC Chennai had issued further notice under Section 206(3) of the Companies Act, 2013 dated 23.02. 2024.The notices were issued for broadly ascertaining the following compliances:

(i) Provide details of all the actions taken by the company to identify its significant Beneficial Powner in terms of Section 90(4A) of the Companies Act,2013

(ii) Provide details of all the BEN-4 notices issued by the company along with a copy thereof

(iii) Provide the details of the application moved by the company to the Hon’ble NCLT in terms of Section 90(7) of the Companies Act, r/w Rule 7 of the Companies (Significant Beneficial Owners), Rules, 2018.

The company vide email dt 05.03.2024 submitted copies of some BEN forms. After examination of documents submitted by the company, the ROC Chennai had issued another notice U/s. 206(3) of the Companies Act,2013 on 02.04.2024 directing the company to provide the list of shareholders of M/s. YH Precision (M) SDN BHD and M/s. Yuhan Precision Company Limited and the ultimate holding company from financial year 2018-19 to till date. The company vide letter dated 10.04.2024 requested 15 days’ time to furnish the requisite documents, but after that no reply has been received from the company and its directors. As per the records and documents submitted by the company, the company has filed BEN-2 on 22.02.2024 showing Mr. Song Yu Sung as Significant Beneficial Owner.

7. Issue of Adjudication Notice:

As per Rule 3(1) of the Companies (Significant Beneficial Owners) Rules,2018: Declaration of Significant Beneficial Ownership under Section 90- On the date of commencement of the Companies (Significant Beneficial Owners) Amendment Rules, 2019, i.e. 08.022019 every individual who is a significant beneficial owner in a reporting company, shall file a declaration in Form No. BEN-I to the reporting company within ninety days from such commencement i.e. 08052019. Here, the company has sent BEN-4 on 23.07.2019, declaration in BEN-1 received only on 13.02.2024 and the company filed BEN-2 on 29.02.2024 within 30 days from the date of receipt of BEN-4.

The Adjudicating Authority had issued Adjudication Notice to the company and its directors vide Notice No. F. No. ROC. Chn/ASTRUM STAMPING/S.90/2024 dt. 20.05.2024

8. Reply of Company and Directors for Adjudication Notice issued:

The Company Secretary of the company vide letter dated 04.06.2024 informed that the company diligently following up with M/s Yuhan Precision Company Limited (situated in Korea) and M/s. YH Precision (M) SDN BHD (situated in Malesia) to obtain necessary information/documents. Further, requested 10 days’ time to submit the complete set of requisite documents, Thereafter, the director of the company vides letter dated 07.06.2024 & 11.07.2024 submitted:

(a) Share holding Pattern of M/s. Astrum Stamping Private Limited (Reporting Company)

(b) Share Holding Pattern of M/s. Stellar Plastics (India) Private Limited (Member of Reporting Company)

(c) Share Holding Pattern of M/s. YH Precision (M) SDN BHD (Member of Reporting Company)

(d) Share Holding Pattern of M/s Ws Yuhan Precision Company Limited (Member of Reporting Company)

The company has complied with the filing requirements for the BEN-2 form, which was filed on February 29,2024. The company has made significant efforts to identify the SBOs of M/s. YH Precision (M) SDN BHD and M/s. Yuhan Precision Company Limited. Further, submitted that the delay caused by the shareholders in providing SBO details, hence requested to acknowledge the company’s compliance with the SBO requirements and refrain from taking further action against the company’s Officers.

7. Adjudication Hearing:

The Adjudicating Authority had issued notice of Hearing dated 26.06.2024 by fixing the hearing on 10.07.2024 at 11:10 AM. Pursuant to the said notice, Mr. T. R. Ravichandran, PCS has appeared on behalf of the company and its director/ Officers in default before the Adjudicating Authority on 10.07.2024 and made submissions that there is delay in filing of e-from BEN-2 from the financial year 2018-19 to 22.02.2024 (filing date of BEN-2). Therefore, the matter may be considered accordingly.

(ii) The company being a subsidiary with paid up capital of Rs.12 Crores and does not fall under the definition of small company as per provision of section 2(85) of the companies Act, 2013. Therefore, of imposing the provision lesser penalty as per section 446(b) shall not be applicable in this case.

9. Analysis of Non- compliance of the Companies Act, 2013

It is noticed that the company has issued BEN-4 notice to its members on 01.04.2019 and 23.07.2019. The declaration by the beneficial owner, Mr. Song Yu Sung who holds Significant Beneficial Ownership in shares has submitted declaration in BEN-1 on 13.02.2024 and the company filed form BEN-2 vide SRN F92531110 dated 22.02.2024. It was only after the initiation of the proceedings that the relevant e-forms were filed. Further, the company has not preferred to apply an application before the Tribunal, after 15 days from the expiry of period specified in the notice as per Section 90(7) of the Companies Act, 2013 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. Thereby, the company has violated Section 90 of the Companies Act,2013 and the company and Officers in default are liable for Penalty under Section 90(11) of the Companies Act,2013.

But in this case Mr. Song Yu Sung who holds Significant Beneficial Ownership in shares, submitted declaration only on 13.02.2024, but the company has sent BEN-4 on 01.04.2019 & 23.07.2019, the due date for filing BEN-1 by SBO is 22.08.2019, which led to violation of Section 90(1) of the Companies Act,2013, and the SBO is liable for penalty under Section 90(10) of the Companies Act,2013.

The details of BEN forms related to the company is shown in the below table:

10. Decision

Having considered the facts and circumstances of the case and after taking into account the factors above, it is concluded that, the there is no delay from the company for issuing BEN-4 and filing BEN-2, however company has not taken necessary action after the stipulated time as mentioned in BEN-4, thereby violated Section 90 (4A) r/w Section 90(7) of the Companies Act, 2013 for the period 07.09.2019 (after 15 days from the date of expiry of notice i.e. 22.08.2019) to 21.02.2024 (BEN-2 filed on 22.02.2024) and the company and its Officers in default are liable for penalty under Section 90(11) of the Companies Act, 2013. As per Section 2(60), the KMP would get covered in Officers in default. In this case, the Company Secretary (KMP) was appointed on 09.07.2019.

Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013, a penalty of Rs. 5,00,000/- (Rupees Five lakhs) is imposed on the Company and Rs. 1,00,000/-(Rupees one laid”) is imposed on the Officers in default as mentioned above. Totally Rs.6,00,000/- (Rupees Six lakhs) as penalty amount for violation of Section 90(4A) of the Companies Act, 2013.

Further, the SBO has violated Section 90(1) of the Companies Act,2013. for the period 22.08.2019 (due date for filing BEN-1) to 12.02.2024 (BEN-1 submitted on 13.02.2024). Therefore, the SBO is liable for penalty under Section 90(10) of the Companies Act,2013

Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of Rs.2,00,000/- (Rupees Two lakhs) is imposed on the SBO for violation of Section 90(1) of the Companies Act, 2013.

11. The said amount of penalty shall be paid through online by using the website www.mca.gov.in(Misc. head) within 90 days of receipt of this order and intimate this office with proof of penalty paid.

12. Whereas Appeal against this order may be filed with the Regional Director (SR), Ministry of Corporate Affairs, 5th Floor, Shastri Bhavan, 26 Haddows Road, Chennai-600006, Tamil Nadu within a period of sixty days from the date of receipt of this order, in Form ADJ (available on Ministry website www.mca.gov.in) 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 (Adjudicating of Penalties) Rules, 2014

13. Your attention is also invited to Section 454(8) of the Act in the event of non­compliance of this order, “(8)(i) Where company fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be, within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty five thousand rupees but which may extend to five lakh rupees.

Where an officer of a company or any other person]] who is in default 916151fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.”

(B. SRIKUMAR, ICLS)
REGISTRAR OF COMPANIES
TAMILNADU, CHENNAI.
ADJUDICATING OFFICER