Zerodha Asset Management, key managerial personnel, penalised for failure to appoint CFO
penalties on Zerodha Asset Management Private Limited, commonly known as Zerodha Fund House, and its key managerial personnel, including founder Nithin Kamath. The penalties stem from the company's failure to appoint a chief financial officer (CFO) for a period of 459 days, in violation of Section 203 of the Companies Act, 2013.
The company filed a suo-moto application on January 9, addressing the non-appointment of a CFO between December 20, 2021, and March 23, 2023. This filing led to the MCA's hefty penalty against the company.
“The company did not have a chief financial officer till the appointment of Chintan Vasantlal Bhatt on 24.03.2023, thereby violating the relevant provisions of the act from 20.12.2021 to 23.03.2023 i.e. 459 days,” the MCA order noted.
As per the Companies Act, deemed public companies with a paid-up share capital exceeding Rs 10 crore since their incorporation are required to have full-time key managerial personnel, such as a CFO and a company secretary.
The ministry has imposed the maximum penalty of Rs 5 lakh on Zerodha Fund House. Nithin Kamath has been fined Rs 4.08 lakh, while other key managerial personnel have also been penalised. Directors Rajanna Bhuvanesh has been fined Rs 5.08 lakh and Nithya Easwaran and Tushar Mahajan Rs 1.5 lakh each. Also, CEO Vishal Virendra Jain and company secretary Shikha Singh have each been fined Rs 3.45 lakh.
The company and its key managerial personnel are required to pay these penalties within 90 days of receiving the order.
Zerodha Fund House,
