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ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013, FOR VIOLATION OF SECTION 89(7).
Background
The case relates to Innisfree Cosmetics India Pvt. Ltd. for delay in filing Form MGT-6 under Section 89(7) of the Companies Act, 2013. The company failed to file the form within 30 days of a share transfer dated November 07, 2022 due to an administrative oversight.
Facts of the Case
The beneficial interest in shares held by Mr. Young Soo Kim was transferred from Amorepacific Global Operations Ltd. to Amorepacific Global Operation Pte. Ltd.
The company received the required Form MGT-4 from the registered shareholder and Form MGT-5 from the beneficial owner in compliance with Section 89.
However, the company failed to file the form MGT 6 due to an administrative oversight
After discovering the default, the company voluntarily applied for adjudication.
The company and its officers admitted the default, clarified that the delay was unintentional, and confirmed that the default had been rectified before adjudication.
Order
The Adjudicating Officer (Seema Rath, ROC Delhi) held that the company had not complied with Section 89. The explanation of error was accepted, but liability under Section 89(7) was held to be still applicable.
Penalty Imposed
Innisfree Cosmetics India Pvt. Ltd.: ₹ 4,80,000
Anumita Sharma: ₹ 2,00,000 (Officer in default)
Young Soo Kim: ₹ 2,00,000 (Officer in default)
Johng Sahng Lee: ₹ 2,00,000 (Officer in default)
Mohinder Kumar: ₹ 2,00,000(Officer in default)
Implication
The Registrar of Companies, Delhi adjudicated the company and its officers guilty of non-compliance with Section 89(7) for delayed filing of Form MGT-6. Although the default was unintentional and later rectified, a penalty totalling ₹12.8 lakhs was imposed collectively on the company and its responsible officers. The incident highlights the importance of timely Compliance.