| The Honorable Judge of the Andhra Pradesh High Court today entered a final judgment against two companies for failing to file a balance sheet and profit and loss account with the Registrar of Companies. According to the court's order, filed on March 31, 2019 in the United States District Court for the State of Andhra Pradesh, Jaganmohan Reddy, C.J., as our learned brother, agreed to settle the matter by agreeing to pay $1,000 in disgorgement, prejudgment interest, and a civil penalty. The court also ordered that the company and its directors file a balance sheet and profit and loss account before it is scheduled to hold a general meeting. The court further ruled that there was no need to file the balance sheet or the profit and loss account before a general meeting. In fact, according to the court's order, the company and its directors failed to file the balance sheet and profit and loss account even after they had called a general meeting. The court held that the obligation to file the balance sheet and profit and loss account was independent of the holding of a general meeting. Without admitting or denying the allegations in the complaint, Reddy consented to the entry of a final judgment that permanently enjoins him from future violations of Section 134 of the Companies Act, and orders him to pay a civil penalty of $1,000. The judgment also provides that he will be barred from serving as an officer or director of a public company for five years. The court granted the SEC's request for an asset freeze and other emergency relief. The case was supervised by Sanjay Wadhwa. The SEC appreciates the assistance of the U.S. Attorney's Office for the State of Andhra Pradesh, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority. |