In a significant development, Sylph Technologies Limited and its directors have been served a penalty of Rs. 12.80 lakh imposed by the Ministry of Corporate Affairs (MCA) for the failure to appoint a Chief Financial Officer (CFO).
This penalty, sanctioned by the Adjudicating Officer of the Registrar of Companies, Madhya Pradesh, Gwalior, underscores the importance of complying with regulatory provisions.
Sylph Technologies Limited, with Corporate Identification Number (CIN) L36100MP1992PLC007102 and headquartered at 201 E Johari Palace, 51 MG Road, Tukoganj, Indore-452001, Madhya Pradesh, found itself subject to penalties under Section 203(5) of the Companies Act, 2013. The penalty pertains to the company’s failure to adhere to the requirements of Section 203(1) during the period between November 2, 2018, and May 30, 2019.
Initiated following an inquiry under Section 206(4) of the Companies Act, 2013, directed by the MCA, the adjudication proceedings revealed that Sylph Technologies Limited neglected to appoint a CFO from January 2017 to May 2019, leading to a violation of Section 203(1). Responding to a show cause notice issued by the Registrar of Companies (ROC), Gwalior, under Section 203(1), the directors—Vineet Shrivastav, Rajesh Jain, and Jayshri Jain—explained their resignation in March 2022. The company cited financial constraints in finding eligible candidates as a defense. Despite responses, a hearing scheduled for December 5, 2023, saw no representation from the company.
Concluding that Sylph Technologies Limited and its officers were liable for penalties as per Section 203(5), the Adjudicating Officer levied fines as follows:
– Sylph Technologies Limited: Rs. 5,00,000/-
– Vineet Shrivastav: Rs. 2,60,000/-
– Rajesh Jain: Rs. 2,60,000/-
– Jayshri Jain: Rs. 2,60,000/-
Resulting in a total penalty of Rs. 12,80,000.
The company and its officers are instructed to remit the penalty through the Ministry of Corporate Affairs portal within 60 days from the order date, using personal income sources. Additionally, the order mandates filing Form INC-28, attaching the adjudication order and payment challans within the specified timeframe. Individuals aggrieved by the order possess the right to appeal to the Regional Director within 60 days from receipt.
This order underscores the repercussions of non-compliance, highlighting fines and potential imprisonment for officers failing to adhere within 90 days. It serves as a crucial reminder to companies and officers regarding the significance of meeting statutory requirements, particularly those related to key managerial personnel, and the subsequent financial and legal consequences for non-compliance with the Companies Act, 2013.
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