Reliance Jio's Pre-Deposit via Credit Ledger u/s 35F Prior to 28.10.2022 is Valid: CESTAT

The Ministry of Corporate Affairs (MCA) has penalized a company and its key managerial personnel, including directors, the CFO, and the Company Secretary, for a default in demat compliance. The company had suo moto (on its own) admitted to its failure to facilitate the dematerialization of securities for one of its subscribers as required under the Companies Act. The MCA, through the Registrar of Companies, found that this was a clear violation of the statutory provisions that mandate the issuance of securities in dematerialized form. The penalty was imposed on all responsible officers, emphasizing that the board and key management are collectively accountable for ensuring corporate compliance. This action underscores the MCA's strict stance on adherence to dematerialization rules, which are crucial for transparency and efficiency in the securities market.