The Ministry of Corporate Affairs (MCA) has fined Zerodha Asset Management Company (AMC) and its founder Nithin Kamath for delaying the appointment of a Chief Financial Officer (CFO), which is against the rules.
Fines Imposed:
- Zerodha AMC: ₹5 lakh
- Nithin Kamath: ₹4.08 lakh
- Other Key Personnel:
- Nithya Easwaran: ₹1.5 lakh
- Vishal Virendra Jain: ₹3.45 lakh
- Rajanna Bhuvanesh: ₹5 lakh
- Tushar Mahajan: ₹1.5 lakh
- Shikha Singh: ₹3.45 lakh
They must pay these fines within 90 days.
Company’s Response:
- Vishal Jain (CEO of Zerodha AMC): The delay happened after the company was formed and before it started operations. The company admitted the delay and filed an application to address it.
- Appeal Filed: The company has appealed the order with the Regional Director in Hyderabad on July 16, 2024.
Background:
- Violation Admitted: Zerodha admitted to violating Section 203 of the Companies Act 2013, which requires companies to have key managerial personnel like a CFO within a certain time frame.
- MCA Order: Issued on May 5, 2024, and published on July 31, the order states that non-compliance leads to a fine for the company and its key personnel.
Zerodha AMC is contesting the fines and seeking to resolve the issue through the appeal process.
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