Roc Cracks Down On Sol Pharma Over Dividend

The Registrar of Companies (Hyderabad) has launched prosecution proceedings against the Hyderabad-based SOL Pharmaceuticals for non-payment of dividend, after announcing the same, to its shareholders.

The RoC has filed the case in the Economic Offences Court under Sec 207 of the Companies Act . The proceedings under Section 207 have been launched against all the directors and the company secretary. In addition , the RoC has launched proceedings against the company, chairman, managing director and the then company secretary under section 205 of the Companies Act.

Responding to a faxed questionnaire from Business Standard, SOL Pharma chairman and managing director Chandrasekara Reddy said the company could not disburse the dividend because we were restrained by financial institutions. Accordingly, the shareholders of the company had, at the AGM in December, 1997, unanimously cancelled and revoked the dividend declared for 1995-96.

 

He also added that the proceedings before the court under Section 207 has been stayed till further orders by the Andhra Pradesh High Court

As per Section 207 of the Companies Act `Where a dividend has been declared by a company but has not been paid or the warrant in respect thereof has not been posted within forty two days from the date of declaration to any shareholder entitled to the payment of the dividend, every director of the company (its managing agent or secretaries and treasurers; and where the managing agent is a firm or a body corporate, every partner in the firm and every director of the body corporate; and where the secretaries and treasurers are a firm , every partner in the firm and where they are a body corporate, every director thereof) shall, if he is knowingly a party too the default, be punishable with simple imprisonment for a term which may extend to seven days and also be liable to a fine.