The Registrar of Companies (RoC), Mumbai has fined William Hill Ltd ₹1.08 lakh for failing to submit the required declaration of beneficial interest in the company’s shares within the mandated thirty-day period.
Under Section 89(2) of the Companies Act, 2013, any individual who acquires a beneficial interest in a company’s shares, but whose name is not recorded in the register of members, is required to file a declaration with the company.
Summary of the Case:
William Hill Ltd, a foreign entity, sought adjudication under Section 454 of the Companies Act, 2013, for an offense related to Section 89(2) and Rule 9(2) of the Companies (Management and Administration) Rules, 2014. The company filed an electronic E-form GNL-1 with the Ministry of Corporate Affairs (MCA) and also submitted a physical application through its representative, Nakul Pratap Singh, on February 6, 2024.
William Hill Ltd holds a beneficial interest in a single share of M/s Nimverge Tech India Pvt Ltd, a private company. This interest was established on August 5, 2022, and a share certificate was issued on September 30, 2022. According to Section 89(2) of the Companies Act, 2013, and Rule 9(2) of the Companies (Management and Administration) Rules, 2014, the declaration of such interest must be filed with the company in Form MGT-5 within thirty days of acquisition.
The company claimed that it submitted Form MGT-5 on June 22, 2023, which was past the required thirty-day deadline. During the hearing, the company acknowledged the delay but noted that under Section 89(6) of the Companies Act, 2013, it had complied by recording the declaration in its register and filing Form MGT-6 with the Registrar on July 19, 2023.
Registrar’s Observations:
The RoC observed that under Section 89(2) of the Companies Act and Rule 9(2) of the Companies (Management and Administration) Rules, 2014, the declaration in Form MGT-5 must be submitted within thirty days of acquiring the beneficial interest. Despite acquiring the interest on August 5, 2022, the company did not submit Form MGT-5 until June 22, 2023, well beyond the stipulated period. This delay constituted a breach of the regulations.
In accordance with the Notification dated March 24, 2015, the RoC determined that a penalty was appropriate. The penalty, calculated under Section 89(5) of the Companies Act, was set at ₹50,000 for the initial default period, with an additional ₹58,000 for the extended delay, totaling ₹1,08,000. The maximum permissible penalty is ₹5,00,000, but William Hill Ltd was fined ₹1,08,000 for the late submission of Form MGT-5.
Thus, William Hill Ltd is required to pay ₹1,08,000 as a penalty for the delayed submission.
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