MCA Slaps Rs23.9 Lakh Penalty on Zerodha AM, Nithin Kamath, Directors & CEO: Moneycontrol
Moneylife Digital Team 02 August 2024
The Union ministry of corporate affairs (MCA) has imposed penalties worth Rs23.9 lakh on Zerodha Asset Management Pvt Ltd (Zerodha AM), the company's founder Nithin Kamath, director Rajanna Bhuvanesh and chief executive officer (CEO) Vishal Virendra Jain for failing to appoint a chief financial officer (CFO) within stipulated time, says a report from Moneycontrol.
 
According to the report, MCA has imposed a maximum penalty of Rs5 lakh on the company itself. At the same time, founder Mr Kamath, director Mr Bhuvanesh and CEO Mr Jain received the maximum penalty of Rs4 lakh, Rs5 lakh and Rs3.45 lakh, respectively. Zerodha AM's company secretary Shikha Singh (Rs3.45 lakh), directors Nithya Easwaran (Rs1.50 lakh) and Tushar Mahajan (Rs1.50 lakh) are also penalised by the ministry.
 
Zerodha AM did not comply with the rule until 24 March 2023, when Chintan Bhatt was finally appointed. This delay, spanning 459 days, led to MCA's decision to impose significant penalties.
 
Quoting the MCA order, the report says, "The Company did not have CFO till the appointment of Chintan Vasantlal Bhatt on 24 March 2023, thereby violating the relevant provisions of the Companies Act from 20 December 2021 to 23 March 2023, i.e. 459 days."
 
Earlier this year, Zerodha AM filed a suo-moto application admitting that they had not appointed a CFO, violating Section 203 of the Companies Act, 2013.
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