Company Fined for Violating Private Placement Share Issue Norms
This document is a legal order passed by the Regional Director (South East Region) of the Ministry of Corporate Affairs, based in Hyderabad, highlighting a case associated with Chalasani Hospitals Private Limited, a private company situated in Visakhapatnam, Andhra Pradesh.
Background of Case
- Chalasani Hospitals Private Limited has filed an appeal along with two individuals, Ms. Vijaya Lakshmi Chalasani and Mr. Saileesh Chalasani. All three individuals are appellants in this case. They are all raising objections to the previous decision.
- The appeal was filed via electronic means, i.e., e-form ADJ on March 31, 2025, under SRN AB3122651 (Under Section 454(5) of the Companies Act, 2013, which permits a company or an individual to raise objections against a penalty order passed by ROC.
What Happened Before This Appeal?
- Previously, the Registrar of Companies (ROC), Andhra Pradesh, issued a penalty order (Petition No. PO/ADJ/02-2025/VW/00092) on February 24, 2025. ROC was discovered that the company, i.e., Chalasani Hospitals Pvt. Ltd did not comply to Section 42(9) of the Companies Act, 2013, and hence, imposed a penalty of Rs. 1,80,000, on company and Rs. 1,80,000 on defaulting officer, namely Ms. Vijaya Lakshmi Chalasani, Director and Mr. Saileesh Chalasani, Director (total amount: Rs. 5,40,000).
- Section 42 of the Companies Act deals with private placement of securities, which means offering shares or debentures to a limited number of investors privately (not through a public offering). Under Section 42(9) specifically, whenever a company allots shares through this method, it must file a document called the Return of Allotment (Form PAS-3) with the Registrar of Companies within a specific time limit (usually 15 days from the date of allotment).
- In this case, the company, i.e., Chalasani Hospitals, did not submit this return within the given time period. In conclusion, the ROC imposed a penalty on the company.
- The appellants (the company and the two individuals) were not satisfied with the penalty order of the ROC and hence, filed an appeal in challenge. The hearing was confirmed on May 29, 2025. The company secretary (CS) presented during the case was named Mr. S. Hari Kishore Babu.
Current Status
- This order document indicates the beginning part of the decision made by the Regional Director (RD). The Director is now reviewing the case and the appeal against the earlier penalty. It mentions that the hearing has taken place, and the next parts of the order would explain the Director’s final decision, whether the penalty is upheld, reduced, or cancelled.