Cracking the whip for hiding the beneficial ownership links to a Chinese group, the Registrar of Companies (RoC) has slapped penalties totalling more than Rs 21 lakh on an Indian company and its related individuals as well as entities.

Besides, the Indian company Metec Electronics Pvt Ltd has been directed not to enter into fresh agreements with entities of Metec Group of Companies in China and Hong Kong.

An official in the know on Friday said Metec Electronics Pvt Ltd had portrayed itself as a standalone entity, with shareholdings held by two foreign nationals -- Chen Feiyan and Yang Wen -- and an Indian national.

The company had denied any relationship with China's Metec Group of companies and claimed that the relationship was limited to buying goods only, the official said.

However, the official said the company was "actually operating as a group company of the Metec Group of companies of China".

For the violations, RoC, NCT of Delhi and Haryana have imposed penalties on the company and various entities, including individuals. RoC comes under the corporate affairs ministry.

Under Section 89 of the companies law that pertains to the declaration of beneficial interest in shares, the RoC has slapped penalties totalling Rs 10,21,600 on China's Metec Electronics and three individuals -- Chen Feiyan, Yang Wen, and Vikash Bhardwaj. Each of them has to pay a penalty of Rs 2,55,400, according to an order dated January 8.

Besides, fines amounting to Rs 11,16,200 have been imposed for violating section 90, which relates to the requirement for an individual to declare that he or she is a significant beneficial owner.

As per the order, a total fine of Rs 5 lakh on the Indian company Metec Electronics Pvt Ltd, Rs 3 lakh on Jiangping Hu and Rs 1 lakh on Vikash Bhardwaj.

Jiangping Hu is the significant beneficial owner of Metec Electronics Pvt Ltd.

Besides, there is a fine of Rs 1 lakh on Chen Feiyan, Rs 83,400 on Subodh Kumar and Rs 32,800 on Mohd Rafeek Saifi, the order said.

Bhardwaj, Kumar and Saifi are former directors of the company. Chen Feiyan is a director, according to the order.

Metec Electronics Pvt Ltd -- which is in the business of assembling/ manufacturing sound bars, among others, after procuring goods from China.

The RoC has barred the company from entering into any fresh agreements with Shenzen Beyear Appliances Co Ltd, Shenzen Applessun Electronic Co Ltd, Dongguan Meisen Electronics Co Ltd or any other entity or person of the Metec Group of Companies in China/Hong Kong.

Further, RoC said Metec Electronics Pvt Ltd cannot make any payments to these entities, except in case of goods already received or goods in transit as of the date of the January 8 order. The restriction will be in place till the Indian company declares the names of the registered and beneficial owners of the shares.

The company's links to the Chinese group were found after gathering various details, including from applications made for trademarks and financial statements.

The official said the company in India was applying for the same trademarks which were being applied by the Chinese companies of the group, and the disclosures made to the Indian trademark authorities showed that the Indian company -- Metec Electronics Pvt Ltd -- had expressly stated that it was using the trademark of Meisen in China, the official added.

Further, the official said the registry information of the Chinese companies showed that the foreign nationals who were working as employees in Metec in India were actually holding significant positions in the Chinese companies.

The financial statements of the Indian company showed that the Metec group of companies of China as entities under common control. Also, the sole foreign director of the company was clearly linked to the Chinese group, the official added.

In the past few years, the government has taken action against various Chinese entities for alleged misdoings.

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