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2020 (2) TMI 1209 - AT - Companies LawOppression and Mismanagement - transfer of shares - prosecuting or recommending for prosecution white collar crimes/frauds - investigation under Section 235 to 237 of the Companies Act carried out - HELD THAT:- It is not in dispute that the Hon’ble High Court of Andhra Pradesh vide its order dated 07.07.2011(Page 155 of the appeal) directed the Central Government to investigate into the affairs of the company. The investigation was done and the report stated that right from the incorporation the affairs of the company were not running as enshrined in the provisions of the Companies Act but was running like a fiefdom of the promoter directors. No record is maintained, including the books of accounts, to comply with the regulatory and legal requirements and most the of transactions were being carried out in cash and the Inspectors were helpless in verifying such transactions in absence of any cash book, accounting legers etc. - as per Section 223 Companies Act, 2013 the report submitted by any inspector appointed by the Central Government, shall be admissible in any legal proceeding as evidence in relation to any matter contained in the report. Admittedly since inception, Respondent No.1 has been the Managing Director of the Company and no return has been filed till 2001. No records were maintained for AGM, Board Meeting, financial statement etc and lot of transactions has been taking place in cash only. Therefore, he cannot escape his responsibility for not running the company as per requirements of law - The annual returns filed by the appellant subsequently after they had been in control has been rejected in the impugned order. The consequence is that there is no annual return/financial statements since inception. This compliance needs to be ensured within three months from the date of this order. Inspite of present orders, ROC will be free to take any steps punitive or otherwise under the Companies Act, 2013 for non-filing of statutory returns/documents against the company and directors. Appeal dismissed - decided against appellant.
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