New Delhi: The Ministry of Corporate Affairs (MCA) has imposed a total fine of Rs 18 lakh on a company, an American and six other individuals for failing to disclose significant beneficial ownership and not complying with relevant rules.
The case relates to the Significant Beneficial Owner (SBO) of Lexir Resources Pvt Ltd, which is owned by Lexir Intermediate Corp, while the ultimate holding company is Comvest Lexir Holdings LLC.
The Registrar of Companies (ROC) of NCT Delhi and Haryana had sought SB details and a show cause notice was also issued to Lexir Resources, a Haryana registered company.
The latest order of the ROC – which comes under the MCA – has been passed after conducting a detailed investigation and analyzing the filings made by the concerned entities before the US Securities and Exchange Commission (SEC).
According to the May 6 order, Comvest is owned by Lexir Holdings LLC, the ultimate holding company of Lexir Resources, Comvest Investment Partners LP and Comvest Investment Partners V-A LP.Comvest Investment Partners V LP is a pooled investment vehicle.
"A key point of determination that emerged was who could be treated as an SBO if a company is controlled by a pooled investment vehicle (PIV). In particular, if the general partner is the investment manager of the PIV If it were a body corporate, how would the SBO be determined?
"However, it was noted that the subject company had not provided details of any of these persons in relation to the PIV, who was ultimately controlling the company," according to the 32-page order.
A total fine of Rs 18 lakh has been imposed on Lexir Resources, Michael Falk – identified as SBO – and six other persons, for violations of the Companies Act, 2013 related to SBOs.
A total fine of Rs 7 lakh and Rs 2 lakh has been imposed on Lexir Resources and Falk, among others.Falk is the SBO of the company, which was acquired by Comvest Group on April 9, 2021, the order said. Falk should have filed a form to report itself as an SBO after the expiry of 30 days from the date of acquisition, but failed. Don't do that, it added.
"...in general, the company and its officials failed to take necessary steps to identify the SBOs, thereby violating section 90(4A) of the Act," the order said.
Section 90 of the Companies Act deals with SBOs and the related regulation was enacted in 2019.The ROC noted that filings made with the SEC clearly show that Comvest Advisors LLC, i.e. the investment advisor, is ultimately primarily owned and controlled by its CEO Falk.
Additionally, it says that prior to the hearing, the company had erroneously disclosed that Falk was acting solely in a high professional capacity as CEO of Comvest Advisors LLC.
"It is clear that the subject company's first presentation made no mention at all of the filings made by the investment manager with the SEC. It was only when representatives of the subject company were shown the relevant SEC filings that they acknowledged ownership and control. The fact of will be used by Michael Falk,'' the order said.
The case relates to the Significant Beneficial Owner (SBO) of Lexir Resources Pvt Ltd, which is owned by Lexir Intermediate Corp, while the ultimate holding company is Comvest Lexir Holdings LLC.
The Registrar of Companies (ROC) of NCT Delhi and Haryana had sought SB details and a show cause notice was also issued to Lexir Resources, a Haryana registered company.
The latest order of the ROC – which comes under the MCA – has been passed after conducting a detailed investigation and analyzing the filings made by the concerned entities before the US Securities and Exchange Commission (SEC).
According to the May 6 order, Comvest is owned by Lexir Holdings LLC, the ultimate holding company of Lexir Resources, Comvest Investment Partners LP and Comvest Investment Partners V-A LP.Comvest Investment Partners V LP is a pooled investment vehicle.
"A key point of determination that emerged was who could be treated as an SBO if a company is controlled by a pooled investment vehicle (PIV). In particular, if the general partner is the investment manager of the PIV If it were a body corporate, how would the SBO be determined?
"However, it was noted that the subject company had not provided details of any of these persons in relation to the PIV, who was ultimately controlling the company," according to the 32-page order.
A total fine of Rs 18 lakh has been imposed on Lexir Resources, Michael Falk – identified as SBO – and six other persons, for violations of the Companies Act, 2013 related to SBOs.
A total fine of Rs 7 lakh and Rs 2 lakh has been imposed on Lexir Resources and Falk, among others.Falk is the SBO of the company, which was acquired by Comvest Group on April 9, 2021, the order said. Falk should have filed a form to report itself as an SBO after the expiry of 30 days from the date of acquisition, but failed. Don't do that, it added.
"...in general, the company and its officials failed to take necessary steps to identify the SBOs, thereby violating section 90(4A) of the Act," the order said.
Section 90 of the Companies Act deals with SBOs and the related regulation was enacted in 2019.The ROC noted that filings made with the SEC clearly show that Comvest Advisors LLC, i.e. the investment advisor, is ultimately primarily owned and controlled by its CEO Falk.
Additionally, it says that prior to the hearing, the company had erroneously disclosed that Falk was acting solely in a high professional capacity as CEO of Comvest Advisors LLC.
"It is clear that the subject company's first presentation made no mention at all of the filings made by the investment manager with the SEC. It was only when representatives of the subject company were shown the relevant SEC filings that they acknowledged ownership and control. The fact of will be used by Michael Falk,'' the order said.
