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2020 (2) TMI 762 - AT - Companies LawFinancial mismanagement - manipulation of annual financial statements - siphoning off of funds - HELD THAT:- Smt Shashi Gupta wife of appellant No.2 was appointed and was paid salary of ₹ 50000/- per month and before her appointment no prior approval was obtained. Appellants are unable to convince why her name is not mentioned in the list of employees of the appellant company. NCLT has rightly held that there is deadlock in the company and there is no possibility that the deadlock can be resolved and the business can be operated with the shareholder agreement, MOA and AOA of the appellant company. As the NCLT has allowed the company petition and directed that the increase in authorised capital from ₹ 5 lacs to ₹ 40 lacs by Resolution dated 27.9.2013 is illegal and void. Consequently, Form II filed with the Registrar of Companies is cancelled. NCLT has further directed that there are instances regarding manipulation of annual financial statements and siphoning of funds from the appellant company, therefore, direct to appoint an independent auditor who can perform audit of the financial mismanagement and siphoning of the funds of the appellant company. Appeal dismissed.
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