MCA held that LEIXIR RESOURCES PRIVATE LIMITED and its officers are liable for action under section 90 (11) of the Act for its failure to take necessary steps as per section 90(4A) to identify the SBO in relation to the company. Also, the company and its officers failed to even send a notice [which was mandatorily required to be sent] as per rule 2A (2) of the Companies (Significant Beneficial Owners) Rules, 2018 leading to a contravention of section 90(5) for which penalty has been provided under section 450. All the officers, including the non-executive directors are liable for this violation due to the presumption of clear knowledge on part of each of such directors about the holding structure of the company. Also, the nominees of the Comvest group cannot be absolved of their liability. The period is being reckoned from 09.05.2021 onwards till the issuance of the SCN under section 90, which was issued on 22.03.2024.
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 FOR PENALTY FOR VIOLATION UNDER SECTION 90 OF THE COMPANIES ACT, 2013 IN THE MATTER OF LEIXIR RESOURCES PRIVATE LIMITED (CIN: U74999HR2011PTC043763) (SRN: I00090453)
Violation of Section 90 of Companies Act 2013: MCA imposes Penalty
1. Appointment of Adjudicating Officer: –
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, 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 (hereinafter known as “Rules”) for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas LEIXIR RESOURCES PRIVATE LIMITED (hereinafter known as “company” or “subject company”) having CIN U74999HR2011PTC043763 is a Private Limited Company registered on 30.08.2011 with this office having registered office address at 101 Vatika Business Park, Tower -2, Sohna Road, Sector 49, Gurgaon, Haryana, 122018, India. The financial & other details of the subject company for immediately preceding F.Y.2022-23 as available on MCA-21 portal is stated as under:
| S. No. | Particulars | Details |
| 1. | Paid up capital (INR in Thousands) | 74,248.57 |
| 2. | a. Revenue from operation (INR in Thousands) | 9,42,985.55 |
| b. Other Income (INR in Thousands) | 28,482.82 | |
| a. Profit for the Period (INR in Thousands) | 2,71,610.63 | |
| 3. | Holding Company | YES |
| 4. | Subsidiary Company | YES |
| 5. | Whether company registered under Section 8 of the Act? | No |
| 6. | Whether company registered under any other special Act? | No |
3. The details of the proceedings:
A1. Issuance of a notice under section 206(1)
A notice was issued to the subject company and under section 206(1) of the Act on 07.02.2024 to ascertain compliance of section 90 of the Act and rules made thereunder. In response to which a reply was received on 20.02.2024 from the company, wherein it was inter alia stated as under:
a. The company had not received any declaration in Form BEN-1 pursuant to Section 90(1) of the Act. Further, in terms of Rule 2(1)(h) of the Rules, there is no individual who holds any right or entitlement indirectly and can be considered to be Significant Beneficial Owner (SBO). Therefore, the requirement for procuring the declaration in Form BEN-1 is not applicable. Further, the provisions of filing BEN-2 in terms of Section 90(4) of the Act are not applicable to the company.
b. Comvest Leixir Holdings LLC is its ultimate holding company and Comvest Investments Partners V LP, holds 54.32% in the ultimate holding company, is a Pooled Investment Vehicle (PIV) based in the USA which is a member State of the Financial Action Task Force on Money Laundering and its regulator of the securities market is a member of the International Organization of Securities Commissions. There is no individual in relation to such PIV who is: General Partner or Investment Manager or CEO in case the Investment Manager is Body Corporate or Partnership Entity. The shareholding pattern of upstream entities upto the level of ultimate holding company is as follows:
| Name of Entity | Name of Shareholders | Number of Stock holding |
Percentage of Stock holding |
| Comvest Leixir Holdings, LLC | Comvest Investment Partners V LP | 26,055,706.44 Common Units | 54.32% |
| Comvest Investment Partners V-A LP | 21,823,210.20 Common Units | 45.50% | |
| CVGH Investors, LLC | 85,000 Common Units |
0.18% | |
| Leixir Holdings, LLC | Comvest Leixir Holdings, LLC |
47,963,916.64 Common Units | 99.38% |
| NXT Capital Corporate Finance Investments, LLC | 300,000 Common Units | 0.62% | |
| Leixir Holdings 2, LLC | Leixir Holdings, LLC | 47,074,721.90 Common Units | 89.55% |
| Bona Ventura Holdings Limited | 4,584,194.74 Common Units |
8.72% | |
| Christian Le Brun | 487,680.29 Common Units | 0.93% | |
| Ralph B. Hanahan | 170,688.10 Common Units | 0.32% | |
| Amy Schenker | 9,753.61 Common Units | 0.02% | |
| Norman Weinstock | 243,840.15 Common Units | 0.46% | |
| Leixir Holdings 3, LLC | Leixir Holdings 2, LLC | 100% of Limited Liability Company Interests | 100% |
| Leixir Intermediate Corp. | Leixir Holdings 3, LLC | 1000 Common Shares |
100% |
| Leixir Resources Private Limited [the subject company] | Leixir Intermediate Corp. | 74,24,856 Equity Shares | 99.999987% |
| Leixir Holdings 3, LLC | 1 Equity Share | 0.000013% |
c. At the time of investment by Leixir Intermediate Corp, the management of Leixir Intermediate Corp. had confirmed that there is no individual who can be considered as the significant beneficial owner with respect to the Company. Post such discussions, and review of the holding structure of the Company, it was determined by the Company that there is no significant beneficial owner in the Company. Thus, it had not issued notice in BEN-4 as required in Section 90(5) read with sub-rule (2) of Rule 2A of Companies (Significant Beneficial Owners) Rules, 2018.
A2. Analysis of the reply of the company received on 20.02.2024
The company had categorically denied the requirement of compliance of the provisions of section 90 in its case. It was also noted that the mandatory requirement of sending a notice in BEN-4 as per rule 2A (2) of the Companies (Significant Beneficial Owners) Rules, 2018 has not been complied with.
B1. Clarification sought w.r.t company’s reply vide email dated 12.03.2024
I. After referring to the information available in the public domain, it was highlighted that the Comvest Group appears to be ultimately owned. It was also noted that the partners, professionals and senior executive of the Comvest Group have been appointed as non-executive directors of the subject company, without disclosing in form DIR-12 that they are nominees of the Comvest Group. Further, the website of Comvest group was perused, which revealed the following details about the profile of Mr. William Marshall Griffin:
“Marshall is a Partner and is responsible for sourcing, evaluating, executing and monitoring investments for Comvest’s private equity strategy. “
II. Thus, the following additional information was sought:
a. Names and percentage holding of Limited Partners and General Partners of Comvest Investment Partners V LP and all layers above them.
b. Names and percentage holding of Limited Partners and General Partners of Comvest Investment Partners V-A LP and all layers above them.
c. Name of all shareholders along with shareholding percentage of CVGH Investors, LLC and all layers above them.
d. Why proper disclosure has not been made about Partners, Professionals and Senior Executive of Comvest Group who are actually nominee director of Comvest Group and why these individuals be not considered as SBO w.r.t subject company.
e. It is seen that Comvest Group has acquired Indian entity at 4th layer upstream by acquiring 99.38% in Leixir Holding, LLC. Whether Income Tax as per IT Act, 1961 have been paid. Pls clarify.
III. That the subject company submitted its reply on 19.03.2024 and inter alia submitted as under:
a. From the structure chart of the Company, shared previously, that Leixir Intermediate Corp. (US) holds approx. 99.99% shareholding in the subject Company. Whereas, the ultimate holding company of the subject Company is Comvest Leixir Holdings LLC, with the majority shareholders being Comvest Investment Partners V LP (holding 54.32%) and Comvest Investment Partners V-A LP (holding 45.50%). Accordingly, Leixir Intermediate Corp. (US), as a member of the subject Company, is an entity controlled by Comvest Investment Partners V LP, which is a pooled investment vehicle (based in a member State of the Financial Action Task Force on Money Laundering, with the regulator of the securities market in such member State being a member of the International Organization of Securities Commissions). Additionally, there is no individual in Comvest Investment Partners V LP who serves as a general partner, investment manager, or Chief Executive Officer. Therefore, according to the definition of ‘significant beneficial owner’ provided in Rule 2(1)(h) of the Companies (Significant Beneficial Owners) Rules, 2018, there is no individual who can be considered a significant beneficial owner of the subject Company.
b. Mr. William Marshall Griffin, Director of the Company was appointed as an additional director on April 9, 2021 in accordance with the provisions of the Act. Further, in terms of Section 161(3) of the Act, a nominee director can be appointed by an institution pursuant to the provisions of any law for the time being in force or of any agreement or by the Central Government or the State Government by virtue of its shareholding in a Government company. In our case, the member/ shareholder of the subject Company is not an institution but a body corporate in terms of the provision of the Act.
c. The Partners, Professionals and Senior Executive of Comvest Group are appointed as Non-Executive Directors as they were not drawing any remuneration or availing any financial benefit from the Company, further they are not involved in the day-to-day operations of the Company. With respect to the disclosure of Nominee Director, we would like to state that at the time of appointment of the relevant Directors, the Company had not received any nomination document from Comvest Group. Thus, the appointment of the Director was made as an Additional Director only. There is no restriction under law to appoint non-resident directors in a company incorporated in India. Since the Partners, Professionals and Senior Executive of Comvest Group are appointed as Non-Executive directors, there is no element of significant influence by such persons.
d. Further, we agree with your observation that Mr. Marshall is a Partner and is responsible for sourcing, evaluating, executing and monitoring investments for Comvest’s private equity strategy. Here, we would like to emphasize that Mr. Marshall is performing their aforesaid duties being an employee and partner of Comvest Group and not of the subject Company. Further, Mr. Marshall doesn’t have any right to exercise or, actually exercises (directly or indirectly) any significant influence or control in relation to the affairs of the Company. Mr. Marshall is working as a director of the subject Company in his professional capacity only.
e. The company did not provide details of limited partners and general partners of the LP and the shareholding of the LLC below it saying that those details were not relevant to the present proceedings.
B2. Analysis of the reply of the company dated 19.03.2024
In its financial statements for FY 2022-23, the subject company has declared that Leixir Holdings LLC is the Ultimate Holding Company. But in its written submissions during the proceedings, the company itself submitted that Comvest Leixir Holdings LLC, which holds 99.38% in Leixir Holdings LLC, is actually the Ultimate Holding Company. In addition, the company also stated that Comvest Investment Partners VLP holds 54.32% in Comvest Leixir Holdings LLC. Thus, the disclosures given by the subject company in its financial statements were not accurate. Based on its own reply, Comvest Investment Partners V LP was actually the ultimate holding company (being a Body Corporate) of the subject company. Thus, the member of the subject company was an entity controlled by a Pooled Investment Vehicle, which meant that the provisions of clause (v) of the Explanation III to rule 2(1)(h) of the Companies (Significant Beneficial Owners) Rules, 2018 were clearly applicable in this case. The issue of appointment of the employees of Comvest as directors of the subject company would be dealt in the later part of this order.
C1. Issue of SCN to the subject company under section 90 of the Act on 22.03.2024
I. The authorized representative of the company, Shri Sourav Nath, Principal Associate at J Sagar Associates appeared on 21st March, 2024 to explain the stance of the company. The following issues were brought to his notice:
a. The subject company in its financial statements for FY 2022-23 has pointed out that Leixir Holdings LLC is the Ultimate Holding Company whereas in its written submissions dated 20.02.2024, the company itself has stated that Comvest Leixir Holdings LLC, which holds 99.38% in Leixir Holding LLC, is actually the Ultimate Holding Company. Further, based on the replies of the company it is noted that Comvest Investment Partners V LP holds 54.32% in Comvest Leixir Holding LLC and thus, actually the said LP should be regarded as the Ultimate Holding Company (being a Body Corporate). Moreover, the subject company in its submission has itself stated that the subject company is an entity controlled by PIV.
b. It had emerged that the General Partner as well as the Investment Manager of Comvest Investment Partners V LP were bodies corporate. Thus, as per the rules, the CEO of the Investment Manager ought to have been reported as an SBO. Taking into account the aforesaid submission and as per sub-point (C) of point (v) of Explanation III to Rule 2(1)(h), CEO of the Investment Manager ought to have been reported as a SBO.
II. The aforesaid issues were brought to the notice of the subject company and its directors vide a SCN dated 22.03.2024, company and associated persons were asked to show cause as to why penalty under Section 90 should not be imposed.
III. That the subject company vide email dated 8th April 2024, inter alia submitted the followings as its reply to SCN dated 22.03.2024:
a. We wish to refer to paragraph 3 (vi) of the Show Cause Notice and highlight your reference in the Show Cause Notice to para (C) clause (v) of Explanation Ill to Rule 2(1)(h), according to which, the Show Cause Notice specifies that the CEO of the Investment Manager ought to have been reported as a ‘significant beneficial owner’, in case the Investment Manager is a body corporate or a partnership entity.
b. As you may observe from the above, where the member of the subject company is an entity controlled by the pooled investment vehicle, the individual who in relation to the said pooled investment vehicle is a Chief Executive Officer (where the investment manager of such pooled vehicle is a body corporate) is required to be disclosed under the said provision.
c. As per the literal interpretation of the phrase ‘in relation to the pooled investment vehicle’, it is clear that the Chief Executive Officer referred to in sub-section (C) above (like in case of sub-section (A) and (B)), pertains to the Chief Executive Officer of the said pooled investment vehicle (and not the Chief Executive Officer of the investment manager).
d. If the said provision was intended to cover the Chief Executive Officer of the Investment Manager, the phrase (leading language) ‘the individual in relation to the pooled investment vehicle’ would be rendered meaningless.
e. As mentioned in our previous responses, there is no individual in Comvest Investment Partners V LP i.e. the pooled investment vehicle who serves as a general partner, or an investment manager, or the chief executive officer.
f. Therefore, according to the definition of ‘significant beneficial owner’ provided in Rule 2(1)(h) of the Companies (Significant Beneficial Owners) Rules, 2018, there is no individual who can be considered a ‘significant beneficial owner’ of the subject company.
g. In respect of the above, we would like to also highlight the view of the reputed author Mr. A Ramaiya in the language used in Section 90 of A Ramaiya, Guide to the Companies Act (LexisNexis, 19th Edition, Volume 1, pg 1762-1763) (annexed hereto as Annexure 2). The relevant excerpt from the aforementioned commentary has been reproduced below, for your ease of reference:
(iv) In the Author’s view:
(a) applying the test prescribed under the other paras of Explanation III to rule 2(1)(h) of the Companies (Significant Beneficial Owners) Rules, 2018 in this case is not likely to result in identification of an individual as a significant beneficial owner and limited partners, investment managers or chief executive officers of such pooled investment vehicles are not likely to voluntarily declare themselves as a significant beneficial owner in such a case; and….. (sic)’
The above paragraph has been reproduced from the aforementioned commentary only in reference to how the author has interpreted subsection (C) above and is not intended to highlight anything other than such interpretational reference. The relevant phrase used in the commentary is ‘chief executive officer of such pooled investment vehicle’ which is consistent with the position stated above.
C2. Analysis of company’s reply dated 8.04.2024
The major point of determination that had emerged was who could be regarded as a SBO if a company was controlled by a pooled investment vehicle (PIV). More particularly, how would a SBO be determined if the General Partner and Investment Manager of the PIV were bodies corporate. However, it was noted that the subject company had not provided the details of any of these persons in relation to the PIV which was ultimately controlling the subject company.
D1. Providing an opportunity of being heard to the company
I. The reply furnished by the company was perused and it was found to be incomplete and thus not satisfactory. Accordingly, vide email dated 15th and 16th April 2024, a hearing was scheduled on 29th April, 2024, and the company was asked to provide the reply to the following queries:
a. Discrepancies w.r.t the disclosures in the financial statements of the company and the present submissions insofar as it pertained to the identification of the ultimate holding company.
b. Disclosure of the following information w.r.t Comvest Investment Partners V LP:
i. Name of all persons who are General Partners. In case the General Partners is/are a body corporate, provide unique identification numbers.
ii. Name of Investment Manager along with unique identification numbers.
iii. Name of CEO of the Investment Manager.
c. Proof of shareholding of each layer as submitted earlier i.e, “shareholding structure of M/s. Leixir Resources Private Limited upto the level of Comvest Investment Partners V LP”.
d. Copies of Annual Report of Comvest Investments Partners V LP submitted in the States of Delaware, Florida, Illinois and other States showing the names and positions of the officers.
e. In public records, Adam Kollender is shown as Principal of Comvest Investments Partners V LP. Please state whether he is performing the role of a general partner or an investment manager.
II. That the subject company submitted its reply before the date of hearing vide email dated 22nd April 2024, wherein inter alia it stated as under:
a. Our group financials are consolidated at the level of Leixir Holdings LLC. Comvest Leixir Holdings LLC is acting as aggregator for Comvest Group only (and not for the Leixir Group). There are minority shareholders outside of the Comvest Group as well, and all shareholdings are captured at the Leixir Holdings LLC level. Accordingly, the financial statements of the Company for the financial year 2022-23 reflect Leixir Holdings LLC as the ultimate holding W.r.t Comvest Investment Partners V LP.
b. The sole General Partner of both Comvest Investment Partners V LP (“LP 1”) and Comvest Investment Partners V-A LP (LP 2) is an entity, Comvest V Partners LP.
c. Comvest V Partners LP, i.e., the General Partner entity, designates management of LP 1 and LP 2 to Comvest Advisors LLC which is an entity registered with U.S. Securities and Exchange Commission (SEC) as an investment advisor under the registration number 801-74325.
d. The chief executive officer (CEO) of Comvest Advisors LLC, i.e., the Investment Manager entity, is Mr. Michael Falk, Michael is working as the CEO of Comvest Advisors LLC solely in his professional capacity, the investment decisions are made collectively by a committee (not on an individual basis).
e. Further to inform you that Mr. Michael Falk neither himself alone or together with any person or trust or pursuant to an agreement or understanding, formal or informal
i. exercising any rights or entitlements, or
ii. exercising control or significant influence, over Leixir Resources Private Limited
f. It is hereby clarified that the above disclosure is being provided in response to the ROC’s request. We reiterate that, in our view, it is the CEO of the pooled investment vehicle that is required to be disclosed, not the CEO of the Investment Manager, in terms of paragraph (v) of Explanation Ill of Rule 2(1)(h) of the Companies (Significant Beneficial Owners) Rules, 2018 (“Rules”). Further, please refer to the template of Form No. BEN-I and instruction kit for e-Form BEN- 2. As per paragraph 3(f) of Form No. BEN- 1, the status of significant beneficial owner in the member of the reporting company is required to be disclosed in case there is an individual who is General Partner, Investment Manager or CEO in case of pooled investment vehicle or entity controlled by pooled investment vehicle’ – Similarly, as per Part Il of the instruction kit for e-Form BEN-2 (at pages 5-6), in case of entity controlled by a pooled investment vehicle, General Partner/investment manager/CEO of PIV is required to be disclosed.
g. Since Form No. BEN-1 or the instruction kit for e-Form BEN-2 does not contemplate disclosure of an individual that is a CEO of the Investment Manager per se, it is evident that paragraph (v) of Explanation Ill of Rule 2(1)(h) is triggered only when there is an individual who is a CEO of the pooled investment vehicle. As stated in our previous responses, no individual within LP 1 serves as the CEO, thus exempting the Company from obligations under the Rules.
h. Comvest Advisors LLC serves as the Investment Manager for both LP I and LP 2. Comvest Advisors LLC employs numerous individuals across various funds and strategies. Adam Kollender is one of the employees of Comvest Advisors LLC, but does not hold a management position within the entity. There are other employees as well who are serving as Principal’ at Comvest Advisors LLC. We understand that you have taken the name of Mr. Adam Kollender from the public record. Name of a person on public record may show his designation but no one can come to the conclusion that a particular person is controlling the affair of reporting company. As previously mentioned, investment decisions are made by the respective investment committees based on the fund or strategy involved and not on the individual basis.
i. Further to inform you that Mr. Adam Kollender neither himself alone or together with any person or trust or pursuant to an agreement or understanding, formal or informal
a) exercising any rights or entitlements, or
b) exercising control Or significant influence, over Leixir Resources Private Limited.
III. Shri Sagar Grover, Company Secretary of the subject company and Shri Vikas Gera, PCS/Authorised representative appeared for the hearing held on 29th April 2024 and based on their submissions in this matter and oral submissions, following queries were raised:
a. Reporting channel of all the directors of the subject company.
b. Date of acquisition of the subject company by the Comvest Group.
c. List of all directors working in the company who are nominees of the Comvest Group.
d. It is seen that information submitted w.r.t Mr. Michael Falk in company’s dated 22nd April 2024 is contrary to filings done by Comvest Advisors LLC to SEC (which is available on the website of SEC). Clarify with proper documents and also state as to why Mr. Michael Falk should not be considered as SBO in terms of Sec 90 of the Companies Act, 2013 and rules made thereunder.
IV. In response to the queries raised during the hearing, vide email dated 3rd May 2024, following has been submitted:
a. All the directors of the Company operate independently in their fiduciary capacity in accordance with the Companies Act, 2013 and the rules framed thereunder, and in the Company’s best interests. The board of directors of the Company are accountable for reporting the Company’s performance to the shareholders, including the majority shareholder, i.e., Leixir Intermediate Corp. (which is ultimately controlled by Comvest Investment Partners V LP and Comvest Investment Partners V-A LP, as indicated in the structure chart provided earlier).
b. The acquisition of the Company by the Comvest Group entities was completed on April 9, 2021.
c. Following the acquisition of the Company by the Comvest Group on April 9, 2021, Mr. William Marshall Griffin (an employee of the Comvest Group) was appointed as non-executive additional director as one of the board members in the Company’s board and his appointment was regularised in the ensuing shareholders’ meeting. Subsequently, Mr. Krishna Srirama Bhadriraju (an employee of the Comvest Group) was appointed as an additional non-executive director on February 2, 2022, and then regularised in the ensuing shareholders’ meeting.
d. It is imperative to clarify that the said non-resident directors have been appointed as nonexecutive additional directors to the Company’s board solely in their professional capacity. The Company has not received any specific nomination document from the Comvest Group at the time of appointment of the relevant directors to its board.
e. Additionally in terms of Section 161 (3) of the Companies Act, 2013, a nominee director can be appointed by an institution pursuant to the provisions of any law for the time being in force or of any agreement or by the Central Government or the State Government by virtue of its shareholding in a Government company. In our case, the member/ shareholder of the Company is not an institution, but rather a body corporate in terms of the provisions of the Companies Act, 2013.
f. As previously confirmed, Comvest Investment Partners V LP is a pooled investment vehicle and does not have any individual that serves as its general partner, investment manager or chief executive officer (CEO). As mentioned earlier, the investment manaqer for Comvest Investment Partners V LP is Comvest Advisors LLC. Comvest Advisors LLC is in the business of providing ‘investment supervisory services’ to its clients, which consist primarily of private investment funds (including Comvest Investment Partners V LP). Comvest Advisors LLC is controlled by Comvest Group Holdings LP, which is ultimately principally owned and controlled by Mr. Michael Falk, who is also the designated CEO of Comvest Advisors LLC. Despite Michael’s ownership status, the decisions at the Comvest Advisors LLC level with respect to the investment funds that it manages are typically made by various investment committees, as stated before.
g. Further, on page 4 of the ‘Investment Adviser Brochure’ of Comvest Advisors LLC dated March 29, 2024, as publicly available on the website of the United States Securities and Exchange Commission (SEC), Comvest Advisors LLC is listed as principally owned and controlled by Mr. Michael Falk (through Comvest Group Holdings LP), in line with the comments above. Additionally, on paqe 5 of the said brochure, Comvest Investment Partners V LP is mentioned as one of the clients of Comvest Advisors LLC. not a subsidiary. Thereby, Michael’s ownership stake in Comvest Group Holdings LP does not automatically confer upon him a ‘significant beneficial owner’ status in relation to Comvest Investment Partners V LP. The brochure is attached hereto as Annexure 1.
h. In our previous submission under letter dated April 22, 2024, we have made the following statement regarding Mr. Michael Falk (refer to Reply to Point No. 4):
“The chief executive officer (CEO) of Comvest Advisors LLC, i.e., the Investment Manager entity, is Mr. Michael Falk. Michael is working as the CEO of Comvest Advisors LLC solely in his professional capacity, the investment decisions are made collectively by a committee (not on an individual basis)”.
The above statement is factually correct and does not contradict the above filings done with the SEC. We reiterate the fact that the details regarding Mr. Michael Falk have been provided to your offices in good faith and in response to the specific query raised in this respect.
4. Overall Analysis
A. The law relating to Limited Partnership – PIV
I. The holding structure of the subject company clearly shows that at the top of the hierarchy, Comvest Leixir Holdings, LLC is almost entirely held by Comvest Investment Partners V LP [having 54.32% stock holding] and Comvest Investment Partners V-A LP [having 45.50% stock holding]. Both the limited partnerships [LP] are registered in the State of Delaware in the US.
II. The law relating to limited partnership in Delaware defines a limited partnership as under1:
“Limited partnership” and “domestic limited partnership” mean a partnership formed under the laws of the State of Delaware consisting of 2 or more persons and having 1 or more general partners and 1 or more limited partners, and includes, for all purposes of the laws of the State of Delaware, a limited liability limited partnership.”
III. The definition makes it clear that the LP is mandatorily required to consist of at least two actors – one general partner and one limited partner. The limited partners are investors in a LP and are not generally involved in the day-to-day management which is left to the general partners.
IV. The liability of the limited partners under the law is as under2:
“A limited partner is not liable for the obligations of a limited partnership unless he or she is also a general partner or, in addition to the exercise of the rights and powers of a limited partner, he or she participates in the control of the business. However, if the limited partner does participate in the control of the business, he or she is liable only to persons who transact business with the limited partnership reasonably believing, based upon the limited partner’s conduct, that the limited partner is a general partner.”
V. The liability of the general partner under the law has to understood in conjunction with the provisions of the Delaware Uniform Partnership Law. 6 Del. C. § 17-403(b) provides as under:
“Except as provided in this chapter, a general partner of a limited partnership has the liabilities of a partner in a partnership that is governed by the Delaware Uniform Partnership Law in effect on July 11, 1999 (6 Del. C. § 1501 et seq.) to persons other than the partnership and the other partners. Except as provided in this chapter or in the partnership agreement, a general partner of a limited partnership has the liabilities of a partner in a partnership that is governed by the Delaware Uniform Partnership Law in effect on July 11, 1999 (6 Del. C. § 1501 et seq.) to the partnership and to the other partners.”
VI. Thus, the liabilities of the general partner of the LP are at par with the liabilities of the partner under the partnership law. On 1st January, 2000, the Delaware Revised Uniform Partnership Act, 6 Del. C. § 15-101, et seq., became effective. Except in limited circumstances, the Act replaced the Delaware Uniform Partnership Act, 6 Del. C. § 1501, et seq., as the governing statute for Delaware general partnerships. The relevant provision of the Delaware Uniform Partnership Law provides as under3:
“(a) Except as otherwise provided in subsections (b) and (c) of this section, all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law.
(b) A person admitted as a partner into an existing partnership is not personally liable for any obligation of the partnership incurred before the person’s admission as a partner.
(c) An obligation of a partnership arising out of or related to circumstances or events occurring while the partnership is a limited liability partnership or incurred while the partnership is a limited liability partnership, whether arising in contract, tort or otherwise, is solely the obligation of the partnership. A partner is not personally liable, directly or indirectly, by way of indemnification, contribution, assessment or otherwise, for such an obligation solely by reason of being or so acting as a partner.”
VII. Thus, the liability of the general partner of the LP is unlimited. The law provides for delegation of authority by the general partner, the relevant provision is as under4:
“Unless otherwise provided in the partnership agreement, a general partner of a limited partnership has the power and authority to delegate to 1 or more other persons any or all of the general partner’s rights, powers and duties to manage and control the business and affairs of the limited partnership, which delegation may be made irrespective of whether the general partner has a conflict of interest with respect to the matter as to which its rights, powers or duties are being delegated, and the person or persons to whom any such rights, powers or duties are being delegated shall not be deemed conflicted solely by reason of the conflict of interest of the general partner. Any such delegation may be to agents, officers, and employees of the general partner or the limited partnership and by a management agreement or another agreement with, or otherwise to, other persons, including a committee of 1 or more persons. Unless otherwise provided in the partnership agreement, such delegation by a general partner of a limited partnership shall be irrevocable if it states that it is irrevocable. Unless otherwise provided in the partnership agreement, such delegation by a general partner of a limited partnership shall not cause the general partner to cease to be a general partner of the limited partnership or cause the person to whom any such rights, powers and duties have been delegated to be a general partner of the limited partnership. No other provision of this chapter or other law shall be construed to restrict a general partner’s power and authority to delegate any or all of its rights, powers, and duties to manage and control the business and affairs of the limited partnership.”
VIII. Upon reading the relevant provisions of the laws of Delaware, it is clear that while the general partner has the onus to manage the affairs of the LP, its liability under the law is unlimited. This is one of the main reasons for appointment of bodies corporate as general partners, so that the overall liability can be limited. For the same reason, the investment managers appointed by the general partners are bodies corporate.
B. Analysis of the arguments of the company insofar as it says that there is no individual who is an SBO in relation to the company
I. The relevant provision of rule 2(1)(h) of the Companies (Significant Beneficial Owners) Rules, 2018 is as follows:
“significant beneficial owner” in relation to a reporting company means an individual referred to in sub-section (1) of section 90, who acting alone or together, or through one or more persons or trust, possesses one or more of the following rights or entitlements in such reporting company, namely:-
(i) holds indirectly, or together with any direct holdings, not less than ten per cent of the shares;
(ii) holds indirectly, or together with any direct holdings, not less than ten percent of the voting rights in the shares;
(iii) has right to receive or participate in not less than ten per cent. of the total distributable dividend, or any other distribution, in a financial year through indirect holdings alone, or together with any direct holdings;
(iv) has right to exercise, or actually exercises, significant influence or control, in any manner other than through direct holdings alone:
***
Explanation III. – For the purpose of this clause, an individual shall be considered to hold a right or entitlement indirectly in the reporting company, if he satisfies any of the following criteria, in respect of a member of the reporting company, namely:-
***
(v) where the member of the reporting company is, –
(a) a pooled investment vehicle; or
(b) an entity controlled by the pooled investment vehicle, based in member State of the Financial Action Task Force on Money Laundering and the regulator of the securities market in such member State is a member of the International Organization of Securities Commissions, and the individual in relation to the pooled investment vehicle,–
(A) is a general partner; or
(B) is an investment manager; or
(C) is a Chief Executive Officer where the investment manager of such pooled vehicle is a body corporate or a partnership entity.
II. The subject company has submitted that the general partner of both Comvest Investment Partners V LP (“LP 1”) and Comvest Investment Partners V-A LP (LP 2) is an entity, Comvest V Partners LP [body corporate] and the general partner has designated the management of LP 1 and LP 2 to Comvest Advisors LLC [body corporate]. Thus, neither the general partner nor the investment manager/investment advisor is an individual. As regards the CEO, it has been submitted that LP 1 and LP 2 do not have a CEO. Thus, it has been argued that there is no SBO in relation to the subject company.
III. In the SCN issued by this office, it was averred that the CEO of the investment manager ought to have been reported as an SBO. The subject company has argued against this by principally raising the following arguments:
- The literal interpretation suggests that the individual to be regarded as a SBO should be the CEO of the PIV and not the CEO of the Investment Manager;
- In the Commentary of A Ramaiya on the Companies Act, the CEO is referred as the CEO of the PIV;
- Form No. BEN-I and instruction kit for e-Form BEN- 2 refers to the CEO as CEO of the PIV.
IV. The interpretation given by the company is not acceptable due to the following reasons:
- The relevant rule uses an expression “in relation to the pooled investment vehicle” which has a wider connotation. Secondly, the CEO is required to be reported when the investment manager is a body corporate or a partnership entity. The rule is designed to identify an individual who is a SBO.
- The law related to limited partnerships requires at least two actors – one general partner and one limited partner.
- Limited partners do not control and manage the affairs of the LP, a task that is assigned to the general partners.
- The laws provide for delegation of the powers by the general partner to other person(s) for managing and controlling the affairs of the LP. In pursuance of the same, the general partner, i.e. Comvest V Partners LP of both the Comvest Investment Partners V LP (LP 1) and Comvest Investment Partners V-A LP (LP 2) has designated their management to Comvest Advisors LLC, i.e., the Investment Manager and its CEO is Mr. Michael Falk. Now since, the management of both the LP 1 and LP 2 [which together control the member of the subject company] is in the hands of the investment manager. Thus, the CEO of the investment manager would in sum and substance act be the CEO of LP 1 and LP 2.
- The subject company has relied on the Commentary on Shri A Ramaiya to state that it also refers to the CEO as the CEO of the PIV. However, the relevant para quoted by the subject company actually highlights a concern of the author that the limited partner, investment manager or the CEO of the PIV are not likely to come forward and disclose. The present issue of interpretation has not been discussed at any length. In fact, the Commentary also refers to “limited partners” in the context of SBO, which is not at all required to be disclosed under the rules. Thus, the para of the Commentary of Shri A Ramaiya is not relevant for resolving the present issue of interpretation.
- The relevant text in Form No. BEN-1 has a category of SBO as “General Partner, Investment Manager or CEO in case of pooled investment vehicle or entity controlled by pooled investment vehicle”. This text does not expressly state “CEO of the PIV”. However, the instruction kit of Form No. BEN-2 does refer to it. Such reference is only generic in nature. It is clear from the above that the rules provide for identification of the CEO only in a case when the investment manager is a body corporate. An investment manager which is a body corporate tasked to manage and control the LP, is also itself managed by a CEO. The same CEO, i.e. the CEO of the investment manager will be in sum and substance be the CEO of the PIV.
- The very purpose of this rule is to identify an individual “in relation to the PIV” which indirectly controls the member of the subject company. The CEO of the investment manager is in effect the CEO of the PIV. Hon’ble Supreme Court in Indian Social Action Forum (INSAF) v. Union of India5 has explained the principle of purposive construction as follows:
“It is settled principle of interpretation that the provisions of the statute have to be interpreted to give the words a plain and natural meaning. But, if there is scope for two interpretations, the Courts have preferred purposive construction, which is now the predominant doctrine of interpretation. In case of ambiguity in the language used in the provision of a statute, the Courts can take aid from the historical background, the Parliamentary debates, the aims and objects of the Act including the long title, and the endeavour of the Court should be to interpret the provisions of a statute to promote the purpose of the Act.”
- In addition, the filings6 made by Comvest Advisors, LLC, i.e. the investment advisor on the website of U.S. Securities and Exchange Commission (SEC) are also relevant. The relevant text of the said filing is as under:
“Comvest Advisors, LLC [“Comvest”], a registered investment adviser, is a Delaware limited liability company. Comvest and its affiliated investment advisers provide “investment supervisory services” to their clients, which consist primarily of private investment funds. Comvest and its affiliates and predecessor entities have been in business since 2000. Comvest is controlled by its member, Comvest Group Holdings LP (“Comvest Group Holdings”), which is ultimately principally owned and controlled by Michael Falk.
The following are certain of the entities affiliated with Comvest: General Partners
• Comvest IV Partners, L.P.
• Comvest V Partners, L.P.
• Comvest Capital II Partners, L.P.
• Comvest Capital III Partners, L.P.
• Comvest Capital IV Partners, L.P.
• Comvest Capital IV Partners GP, SARL
• Comvest Credit V GP, L.P.
• Comvest Credit V Partners GP, SARL
• Comvest SG Partners, L.P.”
(Emphasis supplied)
- The filings made in SEC clearly suggest that Comvest Advisors, LLC, i.e. the investment advisor is ultimately principally owned and controlled by its CEO, Mr. Michael Falk. Prior to the hearing, the subject company had erroneously submitted that Mr. Michael Falk was working as the CEO of Comvest Advisors LLC solely in his professional capacity. The clarification issued by the subject company after the hearing is not understandable as they have conceded to the position stated in the SEC filings and yet maintained that Mr. Falk is working solely in his professional capacity. It is clear that the earlier submissions of the subject company did not at all refer to the filings made by the investment manager before SEC. It is only when the representatives of the subject company were shown the relevant filings of the SEC that they admitted to the factum of ownership and control being exercised by Mr. Michael Falk. The filings made to SEC clearly suggest that Comvest Advisors, LLC, i.e. the investment manager in this case is controlled by Mr. Michael Falk and the sole General Partner of both Comvest Investment Partners V LP (“LP 1”) and Comvest Investment Partners V-A LP (LP 2) is an entity, Comvest V Partners LP, which is affiliated to the investment manager [Comvest Advisors LLC]. Therefore, it is apparent that Mr. Michael Falk ought to have been reported as a SBO on an additional ground mentioned in rule 2(1)(h)(iv) of the (Significant Beneficial Owners) Rules, 2018 which covers a scenario where an individual has right to exercise, or actually exercises, significant influence or control, in any manner other than through direct holdings alone. The aspect of control is also evident in the appointment of directors of the Comvest Group in the subject company without disclosing the fact in Form No. DIR-12 that they represent the interests of the Comvest Group.
V. On the basis of the aforesaid findings, it is clear that Mr. Michael Falk is the SBO of the subject company. The subject company was acquired by the Comvest Group on 9th April, 2021. Accordingly, Mr. Michael Falk ought to have filed Form No. BEN-1 to report himself as the SBO after a lapse of 30 days from the date of acquisition, i.e. on 08.05.2021, which he failed to do so. While the company and its officers failed to even send a notice [which was mandatorily required to be sent] as per rule 2A (2) of the Companies (Significant Beneficial Owners) Rules, 2018 leading to a contravention of section 90(5) for which penalty has been provided under section 450. Also, in general the company and its officers failed to take necessary steps to identify its SBO leading to a violation of section 90(4A) of the Act, for which penalty is provided under section 90(11).
C. Analysis of the arguments of the company insofar as it relates to appointment of certain directors
I. During the proceedings, it was noted that a number of directors appear to be affiliated to the Comvest Group, but the form DIR-12 filed by the company does not indicate this. The subject company admitted that Mr. William Marshall Griffin and Mr. Krishna Srirama Bhadriraju were employees of the Comvest group. But, the company argued that in terms of Section 161(3) of the Act, a nominee director can be appointed by an institution pursuant to the provisions of any law for the time being in force or of any agreement or by the Central Government or the State Government by virtue of its shareholding in a Government company. However, the member/ shareholder of the subject Company is not an institution but a body corporate in terms of the provision of the Act.
II. It was additionally submitted by the subject company that the Partners, Professionals and Senior Executive of Comvest Group are appointed as Non-Executive Directors as they were not drawing any remuneration or availing any financial benefit from the Company, further they are not involved in the day-to-day operations of the Company. In addition, the company had not received any nomination document from Comvest Group at the time of appointment of the relevant Directors, the Company.
III. The reasoning of the company regarding the meaning of “institution” under section 161(3) is not correct. The word “institution” is broad enough to cover a body corporate. In addition, the fact that these directors are not drawing salary also suggest that in substance they are acting as nominees of the Comvest Group. It is also relevant to refer to the extract of Form DIR-12 which provides for disclosure of the nominee:
5. The relevant provision of Section 90 – Register of significant beneficial owners in a company are as follows:
(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:
(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.
(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.
(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 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.
Section 450 (Punishment where no specific penalty or punishment is provided)
“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 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.”
The relevant provision Companies (Significant Beneficial Owners) Rules, 2018:
2(1)(b) “control” means control as defined in clause (27) of section 2 of the Act.
2(1)(h) “significant beneficial owner” in relation to a reporting company means an individual referred to in sub-section (1) of section 90, who acting alone or together, or through one or more persons or trust, possesses one or more of the following rights or entitlements in such reporting company, namely:-
(i) holds indirectly, or together with any direct holdings, not less than ten per cent of the shares;
(ii) holds indirectly, or together with any direct holdings, not less than ten percent of the voting rights in the shares;
(iii) has right to receive or participate in not less than ten per cent. of the total distributable dividend, or any other distribution, in a financial year through indirect holdings alone, or together with any direct holdings;
(iv) has right to exercise, or actually exercises, significant influence or control, in any manner other than through direct holdings alone:
Explanation III. – For the purpose of this clause, an individual shall be considered to hold a right or entitlement indirectly in the reporting company, if he satisfies any of the following criteria, in respect of a member of the reporting company, namely:-
(v) where the member of the reporting company is, –
(a) a pooled investment vehicle; or
(b) an entity controlled by the pooled investment vehicle,
based in member State of the Financial Action Task Force on Money Laundering and the regulator of the securities market in such member State is a member of the International Organization of Securities Commissions, and the individual in relation to the pooled investment vehicle,-
(A) is a general partner; or
(B) is an investment manager; or
(C) is a Chief Executive Officer where the investment manager of such pooled vehicle is a body corporate or a partnership entity.
Rule 2A Duty of the reporting company.
***
(2) Without prejudice to the generality of the steps stated in sub-rule (1), every reporting company shall in all cases where its member (other than an individual), holds not less than ten per cent. of its;-
(a) shares, or
(b) voting rights, or
(c) right to receive or participate in the dividend or any other distribution payable in a financial year, give notice to such member, seeking information in accordance with sub-section (5) of section 90, in Form No. BEN-4.
6. Adjudication of penalty: –
i. For the aforesaid reasons, Mr. Michael Falk is the SBO in relation to the subject and is liable to a penalty under section 90(10) of the Act, due to the failure to report as per section 90(1). The period is being reckoned from 09.05.2021 onwards till the issuance of the SCN under section 90, which was issued on 22.03.2024.
ii. The subject company and its officers are liable for action under section 90 (11) of the Act for its failure to take necessary steps as per section 90(4A) to identify the SBO in relation to the company. Also, the company and its officers failed to even send a notice [which was mandatorily required to be sent] as per rule 2A (2) of the Companies (Significant Beneficial Owners) Rules, 2018 leading to a contravention of section 90(5) for which penalty has been provided under section 450. All the officers, including the non-executive directors are liable for this violation due to the presumption of clear knowledge on part of each of such directors about the holding structure of the company. Also, the nominees of the Comvest group cannot be absolved of their liability. The period is being reckoned from 09.05.2021 onwards till the issuance of the SCN under section 90, which was issued on 22.03.2024.
iii. Now in exercise of the powers conferred vide Notification dated 24th March, 2015, and having considered the reply submitted and hearings held in the matter, I do hereby impose the penalty as follows:
Table- I
| Violation section and penal provision
|
Period of default (in days)
|
Penalty imposed on
|
Calculation of penalty amount (in Rs.)
|
Penalty imposed as per Section 90 (10)/ 90(11)/ 450 (in Rs.) |
| A | B | C | D | E |
| Section 90 (1) of the Act penal provision 90(10) of the Act. | 1049 days From 09.05.2021 to 22.03.2024 | Mr. Michael Falk (Significant Beneficial Owner) | 50000 + 1048 x 1000 [10,48,000] =10,98,000 Subject to maximum 2,00,000 | 2,00,000 |
| A | B | C | D | E |
| Section 90 (4A) of the Act, penal provision 90 (11) of the Act. |
1049 days From 09.05.2021 to 22.02.2024 | Leixir Resources Private Limited (company) | 1,00,000 + 1048 x 500 [5,24,000] = 6,24,000 Subject to maximum 5,00,000 |
5,00,000 |
| Mr. Harmeetpal Singh Bindra, Director (Director) | 25,000 + 1048 x 200 [2,09,600] = 2,34,600 Subject to maximum 1,00,000 | 1,00,000 | ||
| Mr. Manish Arora, Director | 25,000 + 1048 x 200 [2,09,600] = 2,34,600 Subject to maximum 1,00,000 | 1,00,000 | ||
| Mr. William Marshall Griffin, Director | 25,000 + 1048 x 200 [2,09,600] = 2,34,600 Subject to maximum 1,00,000 | 1,00,000 | ||
| Mr. Krishna Srirama Bhadriraju, Director | 25,000 + 1048 x 200 [2,09,600] = 2,34,600 Subject to maximum 1,00,000 | 1,00,000 | ||
| Mr. Sagar Grover, Company Secretary | 25,000 + 1048 x 200 [2,09,600] = 2,34,600 Subject to maximum 1,00,000 | 1,00,000 | ||
| Mr. Russell Lee Bryan, Director till 31.12.2023 | 25000 + 966 x 200 [1,93,200] = 2,18,200 | 1,00,000 | ||
| Section 90 (5) of the Act, penal provision Section 450 of the Act. | 1049 From 09.05.2021 to 22.02.2024 | Leixir Resources Private Limited (company) | 10,000 + 1048 x
1000 [10,48,000] = |
2,00,000 |
| Mr. Harmeetpal Singh Bindra, Director (Director) | 10,000 + 1048 x 1000 [10,48,000] = 10,58,000 Subject to maximum 50,000 | 50,000 | ||
| A | B | C | D | E |
| Mr. Manish Arora, Director | 10,000 + 1048 x 1000 [10,48,000] = 10,58,000 Subject to maximum 50,000 | 50,000 | ||
| Mr. William Marshall Griffin, Director | 10,000 + 1048 x 1000 [10,48,000] = 10,58,000 Subject to maximum 50,000 | 50,000 | ||
| Mr. Krishna Srirama Bhadriraju, Director | 10,000 + 1048 x 1000 [10,48,000] = 10,58,000 Subject to maximum 50,000 | 50,000 | ||
| Mr. Sagar Grover, Company Secretary | 10,000 + 1048 x 1000 [10,48,000] = 10,58,000 Subject to maximum 50,000 | 50,000 | ||
| Mr. Russell Lee Bryan, Director till 31.12.2023 | 10,000 + 966 x 1000 [9,66,000] = 9,76,000 Subject to maximum 50,000 | 50,000 |
a. Names of parties as mentioned in Table I above are hereby directed to pay the penalty amount as per column no. ‘E’ therein.
b. The subject company namely LEIXIR RESOURCES PRIVATE LIMITED is required to ensure that the payment of the penalty amount be paid by SBO.
c. The said amount of penalty shall be paid through online by using the website mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
d. Pursuant to section 454(3)(b) of the Act, company, its officers are required to file e-form BEN-2 with respect to Mr. Michael Falk (SBO) within a period of 60 days from the date of this order, after following the due process.
e. 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].
f. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order.
(Pranay Chaturvedi, ICLS)
Registrar of Companies
NCT of Delhi & Haryana
No. ROC/D/Adj/Order/Section 90/Leixir/1978 – 1986
Date: 6.5.2024
Notes:
1 6 Del. C. § 17-101(11)
2 6 Del. C. § 17-303(a)
3 6 Del. C. §§ 15-306(a)-(c)
4 6 Del. C. §17-403(c)
5 Civil Appeal No.1510 of 2020
6 Investment Advisor Brochure – Form ADV Part 2A dated 29th March, 2024 filed by Comvest Advisors, LLC. The link for the same is
https://files.adviserinfo.sec.gov/IAPD/Content/Common/crd_iapd_Brochure.aspx?BRCHR_VRSN_ID=904465
