DCA to bill MNCs for pardon

NEW DELHI: The Department of Company Affairs (DCA) has notified that condonation of delay in filing statutory documents by foreign companies will cost up to nine times the normal filing fee depending on the extent of delay. The Companies Act requires foreign companies to file documents such as balance-sheets, profit and loss accounts, annual reports, papers pertaining to increase authorised share capital etc with the registrar of companies (RoC) in New Delhi and Haryana. Condonation of non-filing of documents was not allowed under the provisions of the Act so far. The department has also notified a five times increase in the filing fee payable by foreign companies from Rs 1,000 to Rs 5,000 per document. The notification came into effect on May 15. It also stipulates stiff graded penalties for delays in delivery of the documents ranging from one time of the normal fee to nine times the fee. According to the notification, foreign companies can get delays of up to one month condoned by paying the filing fee plus the additional fee equal to the filing fee. Delays of more than two years would face an additional fee equivalent to nine times the normal fee. Top government officials told ET that about a 100 foreign companies had sought condonation of continuous non-filing of documents, especially balance sheets and profit and loss accounts. “Several of these companies have not filed their documents for over 10 years,� officials said. DCA will now slap stiff graded late fee fine on these 100 companies. “The stiff penalties would act as a deterrent to such lapses,� an official said. Indian companies would also stop complaining about disparity in treatment, he added. The department is, however, yet to take action on other companies-domestic as well as foreign that have not been filing their documents with the RoCs over the years. These companies have been able to get away as they have not approached the department for condonation as yet. The DCA will have to launch a large-scale search through its field offices to trace and prosecute these companies. In 2000, the government had offered a chance to companies that had not been filing their documents to submit them by paying normal fines under the Company Law Settlement Scheme (CLSS). The government had received a total of 7.88 lakh documents under the amnesty scheme. It had collected an amount of Rs 136.83 crore as fine. Several companies had subsequently got themselves struck off the RoCs’ records under the Fast Track 560 scheme launched by the DCA. Defunct companies can get themselves struck off the RoCs’ records under Section 560 of the Act. However, a large number of companies on the RoCs’ records are still not filing their papers.