NOW , EVERY EMPLOYER HAS TO FILE UNIFIED ANNUAL RETURN ON BONUS PAID WHICH IS TO BE FILED ONLINE BY 1ST FEBRUARY EVERY YEAR UNDER PAYMENT OF BONUS ACT

NOW , EVERY EMPLOYER HAS TO FILE UNIFIED ANNUAL RETURN ON BONUS PAID WHICH IS TO BE FILED ONLINE BY 1ST FEBRUARY EVERY YEAR UNDER PAYMENT OF BONUS ACT

MINISTRY OF LABOUR AND EMPLOYMENT NOTIFICATION

New Delhi,

the 29th January, 2019

G.S.R. 58(E).—Whereas a draft of certain rules further to amend the Payment of Bonus Rules, 1975, among other rules, were published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (i) vide notification of the Government of India in the Ministry of Labour and Employment number G.S.R. 413(E), dated the 23rd April, 2018, inviting objections and suggestions from all persons likely to be affected thereby, within a period of three months, from the date on which copies of Official Gazette containing the said notification were made available to the public;

And whereas copies of the said Official Gazette were made available to the general public on the 23rd April, 2018;

And whereas the objections and suggestions received on the said draft rules from the public have been considered by the Central Government;

Now, therefore, in exercise of the powers conferred by section 38 of the Payment of Bonus Act, 1965 (31 of 1965), the Central Government hereby makes the following rules further to amend the Payment of Bonus Rules, 1975, namely:—

 1. (1) These rules may be called the Payment of Bonus (Amendment) Rules, 2019.

(2) They shall come into force on the date of their publication in the Official Gazette

.

 2. In the Payment of Bonus Rules, 1975, for rule 5, the following rule shall be substituted, namely:- ‘

5. Annual return.- Every employer shall, on or before the 1st day of February in each year, upload unified annual return in Form D on the web portal of the Central Government in the Ministry of Labour and Employment giving information as to the particulars specified in respect of the preceding year:

 3 Provided that during inspection, the inspector may require the production of accounts, books, registers and other documents maintained in electronic form or otherwise. Explanation.-

 For the purposes of this rule, the expression “electronic form” shall have the same meaning as assigned to it in clause (r) of section 2 of the Information Technology Act, 2000 (21 of 2000).’.

[No. Z-20025/24/2018-LRC] MANISH KUMAR GUPTA, Jt. Secy.

Note: The Payment of Bonus Rules, 1975 was published in the Gazette of India dated the 6th September, 1975 vide notification number G.S.R. 2367, dated the 21st August, 1975 and lastly amended vide notification number G.S.R.1115(E) dated the 6th December, 2016

R V Seckar

Practicing Company Secretary

9848915177,

 rvsekar2007@gmail.com

SEBI FINES DIRECTOR OF ACCLAIM INDUSTRIES FOR VIOLATING INSIDER TRADING NORMS

ACCORDING TO SEBI, ABHISHEK MEHTA WAS MANAGING DIRECTOR AND PROMOTER OF THE FIRM AT THE TIME OF VIOLATION.

PENALTY OF RS 42 LAKH ON A DIRECTOR OF ACCLAIM INDUSTRIES

Markets regulator SEBI has slapped a penalty of Rs 42 lakh on a director of Acclaim Industries for violating insider trading norms.

According to Sebi, Abhishek Mehta was managing director and promoter of the firm at the time of violation.

VIOLATION DURING THE MERGER PROPOSAL

In an order, the regulator said it conducted a probe from January to December 2012 regarding the change in the shareholding of Mehta after the company's board principally approved the proposal of merger of the firm with Database Software Technology Pvt Ltd (DSTPL) in January 2012.

NON-INTIMATION TO STOCK EXCHANGES

During the examination, SEBI observed that in February, the board decided not to merge the firm with DSTPL. However, the decision was not informed to the exchange.

Moreover, in August, the firm informed exchange that a meeting will be scheduled for share exchange ratio and scheme of amalgamation regarding the merger with DSTPL.

MISLEADING INFORMATION TO STOCK EXCHANGES

The information was misleading as the decision of cancellation of merger was already taken in the earlier months, SEBI said.

Regarding Mehta, the regulator said being managing director of the firm, he made misleading announcements and had knowledge of company's decision of cancellation of merger.

UPSI (UNPUBLISHED SENSITIVE INFORMATION)

Besides, by selling shares and reducing his shareholding, Mehta was trading when in possession of UPSI (unpublished sensitive information), SEBI said in an order dated January 25.

PROHIBITION OF INSIDER TRADING

By trading when in possession of UPSI, Mehta contravened PIT (Prohibition of Insider Trading) regulations, Securities and Exchange Board of India (SEBI) said, and thereby imposed fine on him.

                                   

SEBI IMPOSED FINE FOR DEALING IN ILLIQUID STOCK OPTIONS

SEBI IMPOSED FINE FOR DEALING IN ILLIQUID STOCK OPTIONS

Markets regulator Sebi has imposed a total penalty of over Rs 20 lakh on four firms for indulging in fraudulent trades, which created artificial volume in the illiquid stock options segment on the BSE.

The regulator has levied a fine of Rs 5 lakh each on Avinash Infra Projects, Bina Udyog, Balajee Structurals and Rs 5.5 lakh on Blackcherry Commosale. 

Avinash Infra Projects	Rs 5 Lacs
Bina Udyog,	Rs 5 Lacs
Balajee Structurals	Rs 5 Lacs
Blackcherry Commosale	Rs 5.5 Lacs

LARGE-SCALE REVERSAL OF TRADES

The Securities and Exchange Board of India (Sebi) conducted an investigation into the trading activities of certain entities in illiquid stock options at the BSE between April 2014 to September 2015, after observing large-scale reversal of trades in the bourse's stock options segment. 

PFUTP (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES)

The probe found that these firms reversed their buy or sell positions with the same counter party during the same day and thus defied the criteria to be called as normal trading practice, the regulator noted in similarly worded separate orders.


By indulging in such trades, these entities violated provisions of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, it added. 

NON-GENUINE TRADE PRACTICES. 

Accordingly, these firms are fined for non-genuine trade practices. 

In April 2018,  SEBI announced to take action in a phased manner against 14,720 entities for fraudulent trade in illiquid stock options segment and passed several orders in past few weeks against such entities. 

SEBI FINES PACL AND ITS DIRECTORS RS 7,269 CRORES FOR ILLEGAL RAISING OF FUND

SEBI FINES PACL AND ITS DIRECTORS RS 7,269 CRORES FOR ILLEGAL RAISING OF FUND

 

 This is the biggest ever fine by SEBI.

 PACL, formerly Pearl Agrotech Corporation, is in the business of realty and land development

PACL's four directors have also been fined for illegal and fraudulent mobilization of funds from the public.

SEBI has said the company deserves maximum penalty for such large-scale duping of the common man. 

SEBI SENDS STRONG MESSAGE TO CORPORATES

Through this massive fine SEBI has sought to send a strong message to the securities market at large, that such violations would not be viewed lightly.

                                     

The penalty follows another order by Sebi last year wherein PACL was asked to refund Rs 49,100 crore it had collected  through illicit schemes over a 15-year period. 

WHOOPING FINE OF RS 7269 CRORES

The Indian capital market regulator Sebi has slapped a fine of Rs 7,269 crore, its highest ever, on PACL and its directors for failing to register the company’s collective investment scheme that mopped up thousands of crore from small investors.

FOUR DIRECTORS WERE INDICTED

The four directors who have been pulled up by the regulator are Tarlochan Singh, Sukhdev Singh, Gurmeet Singh and Subrata Bhattacharya. The regulator alleged, in its order issued on Tuesday, alleged that the firm had mobilized Rs 2686 crore from September 01, 2013 to June 15, 2014.

ILLEGAL MONEY MOBILIZATION

"In the recent past, the country has suffered a lot in the hands of entities who indulge in such illegal money mobilization under various schemes, where in the hard earned money of the common man has been duped. Thus, imposition of deterent penalty is the need of the hour," SEBI said. 

SEBI ISSUE NOTICE TO RAYMEND AS IT FAIL TO OBTAIN A PRIOR APPROVAL FROM THE AUDIT COMMITTEE OF THE COMPANY FOR ALL THE RELATED PARTY TRANSACTIONS .

SEBI ISSUE NOTICE TO RAYMEND AS IT FAIL TO OBTAIN A PRIOR APPROVAL FROM THE AUDIT COMMITTEE OF THE COMPANY FOR ALL THE RELATED PARTY TRANSACTIONS .

SEBI LODR VIOLATION BY RAYMOND

“PROCEDURAL AND TECHNICAL IN NATURE”.

In a clarification to reports that Raymond had received a show cause notice from the Securities and Exchange Board of India (Sebi) for alleged security market violations, the company on Tuesday told the stock exchanges that the notice was related to matters, which are “procedural and technical in nature”. The company is working with the legal advisors to resolve the issues, it added.

SEBIs SHOW CAUSE NOTICE TO RAYMOND

On November 27, 2018, a show cause notice was issued to Raymond by Sebi, which was based on the market violations, which include the failure to take required approvals from the related parties in the JK House leasing episode.

 The company had leased four duplex apartments in the JK House to Pashmina (a subsidiary of the company) in 2003, which the entity further sub-leased to four members of Singhania family, who were a part of the promoter group of Raymond.

PROPERTY RECONSTRUCTION AGREEMENT

In 2015-16, the property under scanner went for reconstruction, following a tripartite agreement signed by both Raymond and Pashmina.

HUGE MONETARY LOSS TO RAYMOND DUE TO RELATED PARTY TRANSACTION

The textile major had paid for all the expenses of the sub-tenants, including the promoters of the company, for their alternative accommodation during the period of reconstruction. The promoters staying in JK House paid a rent of `7,500 per month to Pashmina, which remained same for alternate accommodation provided to Singhanias, 

However, the expenditure incurred by the company to provide alternate accommodation to each of the sub-tenants increased to `12 lakh per month, mentioned the show cause notice by Sebi.

UNFAIR ECONOMIC BENEFIT

“It is alleged that the company provided alternate accommodation to sub-tenants at 99% discount,” said adjudicating officer Jeevan Sonparote in the show cause notice. This arrangement gave an unfair economic benefit to the promoters at the cost of company and its shareholders’ funds, he added.

NO PRIOR APPROVAL FROM AUDIT COMMITTEE

According to the SEBI listing obligations and disclosure requirements (LODR) regulations, all the related party transactions require a prior approval from the audit committee of the company.

RELATED PARTY TRANSACTION

“There is no dispute that the tripartite agreement is a deemed related party transaction, thus any payment arising out of it should be termed as related party transaction. Therefore, audit committee approval was required for payment made pursuant to tripartite agreement,” the show cause notice stated.

NON-DISCLOSURES ON THE MATERIALITY OF EVENTS OR INFORMATION TO THE SHAREHOLDERS

The show cause notice also raised concerns over the required disclosures on the materiality of events or information to the shareholders. The company had defined a policy on determination of materiality of events or information, where it said that if the value involved exceeds 5% of the gross turnover or 20% of the net worth of the company, whichever lower, shall called a material development and has to be disclosed to the shareholders.

OPPORTUNITY COST OF RS 623 CRORES

It is alleged the four duplex apartments were sold to the sub-tenants under the terms laid under tripartite agreement, hence, it would result to an opportunity cost of over `623 crore to the company and shareholders, while 5% of gross turnover of FY16 is `281.64 crore,” the notice said.

However , Raymond calls Sebi notice as  procedural, technical in nature.

RECENT STRIKE-OFF NOTICE BY MCA AND ITS IMPACTS ON GENUINE SMALL PRIVATE LIMITED COMPANIES

RECENT STRIKE-OFF NOTICE BY MCA AND ITS IMPACTS ON GENUINE SMALL PRIVATE LIMITED COMPANIES

SMALL PRIVATE LIMITED COMPANIES AFFECTED BADLY DUE TO MCAs STRIKE-OFF NOTICE

Recently , MCA has started to strike-off the companies which has not filed annual accounts and Annual Return for the last 3 years.  So , many small companies which has serious business but failed to file AOC-4 and MGT-7 were the worst affected by the MCA’s action.

FAMILY OWNED PRIVATE LIMITED COMPANIES

These companies are small family owned private limited companies which are carrying on business but with losses or with meager profits. Due to non-availability of consultants , these companies have failed to file their annual returns or annual accounts.

NO PRIOR NOTICE IS SERVED BY MCA

The worst part of the scenario is that MCA has not served any prior notice to these companies well in advance that their company will be struck off if AOC-4 and MGT-7 is not filed within a stipulated time.

Further , these companies have been refrained from the fundamental rights of giving prior notice well-before taking any serious action against them by MCA.

COMPANIES DEFAULT IN FILING AOC-4 & MGT-7

Many of these companies have regularly filing their IT returns and GST returns and for want of filing MCA returns  , these companies have been  stricken off without prior intimation.

These companies are ready to pay heavy penalty running into lacs to MCA to see that company is reactivated by filing MGT-7 and AOC-4.

DIRECTORS WERE NOT ENTITLED TO FUNCTION AS  DIRECTORS IN OTHER COMPANIES IN WHICH THEY ARE DIRECTORS

The worst part of the MCA action is that the DIN number deactivated directors cannot function as directors in other active companies where they are also directors.

COMPANY BANK ACCOUNTS HAVE BEEN FREEZED

Further , company bank accounts also been freezed and these companies cannot initiate any day to day transaction in their bank accounts.

HOW GENUINE COMPANIES HAVE BEEN AFFECTED ?

MCA claims that their action  of strike-off is against shell companies but these have affected many small private limited genuine companies .

For example , in a small family owned private limited companies , there will be only two directors from the family and due to MCAs strike-off process , the whole business will come to a standstill as DIN number of two directors had been deactivated.

ONLY TWO REMEDIES ARE AVAILABLE TO AFFECTED COMPANIES

For Companies which have been stricken off by ROC , only now two remedies are available .

To file a writ petition in the High Court and get a stay order against MCA’s strike-off notice. To produce the stay order to ROC office and get the DIN numbers of the Directors whose DIN number have been reactivated and then filing all the pending forms and make the company to active status.

By inducting a new director and to file all pending forms with MCA process. This is also known as backend process.

Both the above remedies are cumbersome , time consuming and also expensive to genuine small private companies.

SIMPLE PROCEDURE SUGGESTION BY ROC , VIJAYAWADA

When I met ROC , Vijayawada recently , he has informed that he will reactivate the DIN number of one director whose DIN number has been deactivated mainly to file pending forms with ROC and to make the companies to active status for a limited period of 3 days or one week on the basis of an indemnity bond and a declaration.

STAND TAKEN BY ROC ,CHENNAI

However , when I met ROC , Chennai , he has informed me that there is no such procedure available for reactivating the DIN for a limited period mainly to file pending annual forms with MCA.

He has informed me that he can reactivate the DIN number only on the basis of High Court Order or by back end process.

TWO DIFFERENT VIEWS OF ROCs ON A SUBJECT

It is really confusing how two ROCs can have different views on a subject.

According to me , the key solution suggested by ROC , Vijayawada seems to be client friendly , will be cost wise less and not time consuming.

WILL BRING MORE REVENUES TO MCA

Further , it will bring more revenues to MCA as the affected companies will be ready to pay the additional fee Rs 100 per day for filing pending annual forms.

WILL MCA COME FORWARD TO FIND A SOLUTION TO THIS ISSUE

The above procedure will save a lot of genuine private limited companies which have real business and have been impacted by MCAs strike off notice.

Will MCA come forward to advice ROC , Chennai and other ROCs in India to reactivate the deactivated DIN number of a director only for filing pending annual forms for a limited period  ?

This will remove hardships faced by many small genuine private limited companies which have been impacted by recent MCAs strike-off process.

An Early action on the subject will not only bring relief to many small private limited companies and also huge amount of revenue will be likely to be generated for MCAs.

R V Seckar

Practicing Company Secretary

9848915177

rvsekar2007@gmail.com