Akshata Sharma
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The Ministry of Corporate Affairs (MCA) has fined Zerodha Asset Management Private Limited and its directors and CEO Nithin Kamath for not appointing a Chief Financial Officer (CFO) within the required timeframe, violating the law. Zerodha admitted to this violation on January 9, 2024, stating that they did not appoint a CFO, which is mandated for public companies with a share capital exceeding Rs 10 crore.
The order says, Section 203(1) of the Act mandates companies of certain sizes to have full-time key managerial personnel, including a CFO and company secretary. Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, specifies that any public company with a paid-up share capital of Rs 10 crore or more must comply.
The order added further that the company failed to comply with this rule until March 24, 2023, when Chintan Bhatt was finally appointed, leading to the ministry's decision to impose significant penalties.
Vishal Jain, CEO of Zerodha Asset Management Private Limited, clarified that the MCA's order applies to the period after the company's incorporation but before it began operations.
The company is contesting the order and has filed an appeal with the Regional Director, Hyderabad. The MCA has fined the company Rs 5 lakh.
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