MANDATORY ROTATION OF DIRECTORS- NON-COMPLIANCE WITH SECTION 152(6)- ROC PENALISED FUSION FINANCE LTD RS 4 LACS

 MANDATORY ROTATION OF DIRECTORS- NON-COMPLIANCE WITH SECTION 152(6)- ROC PENALISED FUSION FINANCE LTD RS 4 LACS

ROC , NEW DELHI VS FUSION FINANCE LIMITED

SECTION 152(6) OF THE COMPANIES ACT, 2013 MANDATES:

·      At least 2/3rd of total directors of a public company shall be liable to retire by rotation

·      Such rotational directors must be non-independent directors

·      Ensures periodic shareholder control over board composition

VIOLATION DETAILS

PERIOD OF DEFAULT	20 July 2021 – 08 July 2023
REQUIREMENT	Minimum 3 non-independent directors liable to retire by rotation
ACTUAL	Only 1 rotational director was designated
RESULT	Non-compliance with Section 152(6) for 2 years

PENALTY IMPOSED

Person	Penalty
Company	₹3,00,000
Total	₹4,00,000

KEY OBSERVATIONS BY ROC

STRICT LIABILITY NATURE	Non-maintenance of board composition = direct violation
INDEPENDENT DIRECTORS	NOT held liable Only those in charge of compliance treated as “officer in default”
NATURE OF PENALTY	Continuous default aggravates penalty exposure
OFFICER IN DEFAULT LIABILITY	·      Managing Director held personally liable ·      Reinforces Section 2(60) accountability

KEY TAKEAWAYS

This case reinforces that:

·      Board structure compliance is a substantive obligation, not a formality.

·      Increased scrutiny of governance lapses.

·      No leniency even if default is later rectified.

YOUR COMPLIANCE PARTNER – R V - SECKAR , FCS, LLB 79047 19295