Article
RoC’s recent adjudication order against a global corporate – A regulatory oversight on Significant Beneficial Ownership
By Noorul Hassan and Aman Gupta
Recently, the Registrar of Companies, NCT of Delhi & Haryana imposed penalties against a global corporate and its Directors along with its Global CEO, including CEO of the holding company, for violating the provisions related to non-disclosure of Significant Beneficial Ownership (‘SBO’) under Section 90 of the Companies Act, 2013. The article in this issue of Corporate Amicus analyses the jurisprudence behind the SBO and the RoC’s approach towards the Order. The article notes that the RoC has outlined the parameters such as control over the Board of Directors, financial control with the upstream entities, control through contractual agreements, Directors of the subject company holding top positions in the upstream entities, and power of the top managerial personnel through bylaws of the upstream entities as criteria to determine control through ‘significant influence’. According to the authors, companies with global corporate structures, need to relook at the requirement of reporting the SBO in the companies.
Notifications and Circulars
- Foreign Exchange Management (Overseas Investment) Directions, 2022 revised to clarify on investments in foreign funds
- International trade settlement in Indian Rupees (INR) – Opening of additional Current Account for settlement of import transactions as well
- Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) Guidelines, 2024 issued
- Lending to Micro, Small & Medium Enterprises (MSME) Sector – Master Direction revised
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- Foreign Portfolio Investors – SEBI updates disclosure requirements
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Ratio decidendi
- MSME Promoters are exempt from net worth criteria for submitting a Resolution Plan under IBC if they provide security deposit and earnest money deposit – NCLT Kolkata
- Application under Section 9 of IBC by Operational Creditor must be supported by strict proof of debt and default – NCLT, Mumbai
- Acceptance of partial payments by Financial Creditor does not invalidate default or legitimacy of insolvency proceedings – NCLAT
- Arbitration award passed in disregard of evidence on record makes it liable to be set aside as being irrational and patently illegal – Delhi High Court
- Corporate Debtor can pursue remedies under IBC even if it had initiated Arbitration proceedings – Delhi High Court
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