Srinagar, Dec 21: Registrars of Companies (ROC) J&K and Ladakh while enforcing strict compliance with corporate governance under the Companies Act has reportedly imposed heavy penalties on companies.
Those companies with a paid-up share capital exceeding Rs 10 crore are supposed to appoint full-time Company Secretaries on their board to comply with the relevant provisions of the law. A failure to make such an appointment would attract an instant penalty of Rs 5 lakh on the company and a fifty thousand rupees instant penalty on each of the directors. For continuing default, a penalty of Rs 1000 per day shall be imposed on each of the directors not exceeding Rs 5 lakh.
It has been learned from reliable sources that many J&K-based big corporate houses belonging to both Jammu and Srinagar have been penalized for non-compliance, and in a few cases where there are more than 5 directors, a total cumulative penalty amount is as high as Rs 25 lakh.
The companies on which the axe has fallen are diverse businesses like automobiles, hotels, and restaurants and extraction of metals and real estate businesses. However, the companies and their directors would be given an opportunity of being heard as per the rules and summons for the recording of their statements and deciding of penalty amount through the ‘in-house adjudication’ process which has already begun and notices have been received by many such companies for the same.
The companies through various professionals argue that they don’t find many company secretaries in Kashmir Valley and as a result the penalty as high as Rs 20 lakh is unwarranted.
