While a fine of INR 5 Lakh each has been imposed on the company as well as its director Rajanna Bhuvanesh, founder Kamath has been charged a penalty of INR 4.08 Lakh
Meanwhile, Zerodha Asset Management plans to contest the order
At the heart of the matter is the company not appointing the CFO for a period of 459 days between December 20, 2021 and March 23, 2023 in violation of Companies Act, 2013
The Ministry of Corporate Affairs (MCA) has reportedly imposed a penalty of INR 23.9 Lakh on Zerodha
Asset Management and its directors over the asset management company’s failure to appoint a chief financial officer (CFO) in the stipulated time.
As per a Moneycontrol report, the MCA slapped the fine on Zerodha Asset Management, its cofounder and director Nithin Kamath, and other key directors for failure to appoint the financial head within the period mandated by the Companies Act, 2013.
While a fine of INR 5 Lakh each has been imposed on the company as well as its director Rajanna Bhuvanesh, Kamath has been charged a penalty of INR 4.08 Lakh. Meanwhile, CEO Vishal Virendra Jain and company secretary Shikha Singh have been levied a fine of INR 3.45 Lakh each, while directors Nithya Easwaran and Tushar Mahajan have been penalised INR 1.5 Lakh each.
At the heart of the matter is the company not appointing the CFO for a period of 459 days between December 20, 2021 and March 23, 2023. It eventually appointed Chintan Bhatt as CFO in March last year.
It is pertinent to note that Section 203 mandates public companies, with a paid-up share capital exceeding INR 10 Cr, to have full-time key managerial personnel, including a CFO. Interestingly, Zerodha Asset Management, in a suo-moto application filed in January 2024, admitted that it had not appointed a CFO during the intervening period.
Meanwhile, the company plans to contest the penalties. Zerodha Asset Management’s CEO Jain told the publication that the order covers the time period before the company commenced operations but after it was incorporated.
“The RoC (Registrar of Companies) order was issued in response to the suo-motu application filed by the company. The Company is contesting the order, and an appeal has already been filed with the Regional Director, Hyderabad on July 16, 2024,” Jain said.
(This story will be updated soon.)
