KOCHI: The Kerala High Court on Wednesday ordered a month’s stay on the order of the Ministry of Corporate Affairs (MoCA) which had cancelled the recognition of Norka-ROOTS and had disqualified its director Dr Azad Moopen by deeming them as ‘shell companies’.
The order came on a petition by Aster DM Healthcare Chairman Moopen, who sought to quash the MoCA order. Moopen’s petition said Norka-ROOTS was a public-sector undertaking which manages all the affairs of the Non-Resident Keralites’ Affairs Department (Norka).
The Kerala Government holds the majority of shares in Norka. Moopen was nominated as Norka-ROOTS director in 2013. The MoCA had the other day disqualified Moopen and cancelled the recognition of Norka-ROOTS for failing to file financial statements. Moopen sought the quashing of the disqualification on the grounds it was not preceded by any notice either to the company or to him personally.
The petition said the act of disqualification has adverse civil consequences to him and to other institutions in which they serve as directors/promoters. Had notice been issued to him, Moopen, the petitioner, could have pointed out the default in filing the financial statements was only on account of the delay in finalising of the audit by the Comptroller and Auditor General (CAG) in terms of the provisions contained in Sections 139/143 of the Companies Act, 2013.
The petition said the CAG audit report of Norka had been finalised only up to 2013-14 and audit reports for financial years following 2013-14 were pending with CAG-appointed auditors. “The company received the 2013-14 audit report itself this month. After receiving it, the company has to call a general meeting and place the report before the members for their approval. Only after this can the returns be filed in terms of Section 137/92 of the Companies Act.
Owing to the CAG’s delay in finalisation of the audit report, Norka-ROOTS are not in a position to circulate the financial statements to members and consequently file returns,” it said.
“The years for which the company filed financial statements and annual returns were 2011-12 and 2012-13, respectively. Norka-ROOTS is a government company as defined under Section 2 (45) of the Companies Act. Hence the MoCA notification does not apply to it,” the petition said. It also made clear Moopen was a non-executive nominee director with no role in the company’s day-to-day management.
Norka-ROOTS CEO points out error in Centre’s website
Norka-ROOTS denied media reports that the recognition of the company or its directors have been revoked by the Union Ministry of Corporate Affairs (MoCA). CEO K N Raghavan said the misunderstanding was caused due to an error in the MoCA website. He said the error had already been brought to the Registrar of Companies’ notice.