ROC impose penalties saying ESOP Approval Cannot Be Replaced by Subsequent Ratification

Integris Medtech granted stock options to subsidiary employees and made grants exceeding 1% of the company’s issued capital without obtaining the separate shareholders’ special resolutions required under Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014. Although shareholders subsequently ratified the grants, the ROC treated the original non-compliance as continuing defaults and imposed penalties under Section 450 of the Companies Act, 2013.