Nithin Kamath, co-founder and CEO of Zerodha, is known for his fitness. The 44-year-old recently joined his colleagues for a workout session in his office. The video went viral in no time. Now, the billionaire, Zerodha Asset Management Private Limited and its key directors were recently fined by the Ministry of Corporate Affairs (MCA) for failing to appoint a Chief Financial Officer (CFO) within the stipulated timeframe, MoneyControl reported.
This leads to violation of Section 203 of the Companies Act, 2013. It requires companies like Zerodha to have full-time key managerial personnel, including a CFO. Such companies are deemed public companies with a paid-up share capital exceeding Rs 10 crore.
Kamath has been fined Rs 4.08 lakh. Director Rajanna Bhuvanesh received the maximum penalty of Rs 5 lakh, followed by CEO Vishal Virendra Jain (Rs 3.45 lakh), Company Secretary Shikha Singh (Rs 3.45 lakh), Director Nithya Easwaran (Rs 1.50 lakh), Director Tushar Mahajan (Rs 1.50 lakh).
On January 9, 2024, Zerodha Asset Management filed a suo-moto application admitting that they had not appointed a CFO, violating the law. The firm did not comply with the said rule until March 24, 2023, when Chintan Bhatt was finally appointed. This delay led to the ministry’s decision to impose significant penalties. Vishal Jain, CEO of Zerodha Asset Management Private Limited, however, said that the order covers the time after the company was incorporated but before it started operations.
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