‘Condonation of delay scheme only for bona fide directors’

‘Condonation of delay scheme only for bona fide directors’

Context

Only bona fide directors will benefit from the proposed scheme that will provide a three-month window for defaulting companies to submit their filings, a senior government official said.

Plan not open for directors of ‘struck-off’ firms, says Corporate Affairs Secretary

The Condonation of Delay Scheme, which would be rolled out by the Ministry of Corporate Affairs, is expected to come as a relief for disqualified directors. It is to be operational from January 1 to March 31, 2018.

‘Many affected’

• Since so many people were affected, the government felt that some resolution was required without compromising the fight against illegal activities.
• The scheme is not open for directors of struck-off companies. They can come only when they [those companies] are restored through the National Company Law Tribunal (NCLT)

Steps by Corporate Affairs Ministry

• As part of clamping down on illicit fund flows, the corporate affairs ministry has disqualified more than 3.09 lakh directors of companies which failed to submit annual filings for a long time.
• Following the move, concerns were raised that many directors of genuine companies have also been disqualified
• Besides, some individuals moved courts against their disqualification.

Director Identification Numbers

• As per a draft circular, the Director Identification Numbers of disqualified directors that have been deactivated would be ‘temporarily activated’ during the scheme period.
• After submitting the filings under the scheme, a company concerned would have to file a separate form seeking condonation of the delay along with a fee of ₹30,000, it added