Companies (Acceptance of Deposits) Second Amendment Rules, 2017

MCA has brought about an amendment to the Companies (Acceptance of Deposits) Rules vide its Second Amendment Rules of 2017 on 19th September, 2017.

Rule 3(3) of the Rules stated that

“No company referred to in sub-section (2) of section 73 shall accept or renew any deposit from its members, if the amount of such deposits together with the amount of other deposits outstanding as on the date of acceptance or renewal of such deposits exceeds [thirty five per cent] of the aggregate of the [Paid-up share capital, free Reserves and securities premium account] of the company.

[“Provided that a private company may accept from its members monies not exceeding one hundred per cent of aggregate of the paid up share capital, free reserves and securities premium account and such company shall file the details of monies so accepted to the Registrar in such manner as may be specified.”]

It is the proviso to Rule 3(3) that is being amended.

The new proviso allows specified IFSC public company and private company to accept monies from its members not exceeding 100% of the aggregate of paid-up share capital, free reserves and securities premium account and such company shall file details of monies so accepted to the Registrar in form DPT-3.

Explanation to the proviso states that specified IFSC public company is an unlisted public company licensed to operate either by RBI, SEBI, IRDA in an approved international financial services centre located in an approved multi services Special Economic Zone.

Another proviso has been added to this sub-rule viz.

that the maximum limit in respect of deposits to be accepted shall not apply to

1. private company which is a start-up for 5 years from the date of its incorporation, or
2. private company which fulfills all the following conditions, viz.

a) which is not an associate or subsidiary of any other company (i.e. a purely private company)

b) the borrowings of such company from banks or financial institutions or any body corporate is less than twice of its paid up share capital or Rs.50 crores, whichever is less (i.e. if the paid up share capital is Rs.1 lakh, then the borrowings should be less than Rs.2 lakhs or Rs.50 crores, whichever is less. So obviously the borrowings in this case should be less than Rs.2 lakhs)

c) company has not defaulted in repayment of such borrowings.

All the three conditions above has to be satisfied in respect of this second clause of this second proviso.

So basically the relaxation in acceptance of deposits is in favour of IFSC public company and start up private company. In respect of a purely private company the relaxations are dependent on its paid up share capital.

The companies accepting deposits should report the same in form DPT-3.

The amendment is available here

Restriction on no. of layers

MCA has come out with a new rule with effect from 20th September, 2017 which is called the Companies (Restrictions on Number of Layers), Rules, 2017.

As per this Rule, no company shall have more than two layers of subsidiaries. Exemptions are wholly owned subsidiary or subsidiaries. Companies can however acquire more than two layers of subsidiaries outside India as per the laws of such jurisdiction.

Banking company, NBFC, Insurance company and government company is exempted from the provisions of these Rules.

Rule 3 says that the provisions of this rule shall not be in derogation to proviso to section 186(1) of the Act. That proviso says, in the first part that the company can acquire any other company incorporated outside India, if such foreign company has investment subsidiaries beyond more than two layers as per the laws of such country. The (b) portion of the proviso says that a subsidiary company can have investment subsidiary for the purpose of meeting any requirement under any law or rule or regulation thereto. The (b) proviso pertains to the Indian jurisdiction. So basically investment subsidiaries are outside the ambit of this Rule if they are the 2nd layer of subsidiaries.

Rule 4 specifies that where a company has subsidiaries in excess of the limits specified in these Rules, as on the date the Rules come into force, then it shall, within 150 days of these Rules, file with the ROC a form i.e. CRL-1, disclosing the details specified therein in the said Form. It shall not after the commencement of these Rules, have any additional layer of subsidiaries more than what it had on the date of commencement of these Rules. In case one or more layers are reduced after these Rules come into force, the Company shall keep the layers of subsidiaries at that reduced level or at the maximum level specified in these Rules. For eg. if a company has 4 layers of subsidiaries at the commencement date and subsequently one layer has dropped off, the company cannot increase the layer from 3 to 4 merely because it had 4 layers at the commencement date. It should be kept at 3 levels only.

Rule 5 is the penalty clause whereby the fine is Rs.10,000 for the company and every officer in default and if it is a continuing default, then further fine of Rs.1000 per day during the period the contravention continues.

So basically the Rule allows the companies to retain their level of subsidiaries, but not add to it. As and when the companies delete one or more of their subsidiaries, then they should retain it at that level or upto two layers and not increase it further.

The Rules is available at the MCA site at here 

The Wizard of Lies

Directed with surgical restraint by Barry Levinson and anchored by a performance of quiet ferocity from Robert De Niro, The Wizard of Lies (2017) emerges not as a mere dramatization of financial fraud, but as a dissection of deception itself — a sombre meditation on trust, vanity, and the cataclysmic implosion of a family built on illusion.

Adapted from journalist Diana B. Henriques’s eponymous book, Levinson’s film eschews the sensationalism that such a scandal might invite. Instead, it peers unflinchingly into the abyss of human self-delusion. The story begins with an almost banal confession — Bernie Madoff (De Niro), the venerated financier and founder of Bernard L. Madoff Investment Securities, calmly informs his sons that his vaunted investment empire is nothing but an elaborate Ponzi scheme — perhaps the most colossal in history. It is 2008, the world economy is already tottering, and this revelation detonates like a moral grenade across Wall Street, the media, and, most cruelly, within his own household.

Levinson structures his narrative as a series of interviews between Madoff and Diana Henriques — played, in an inspired act of meta-casting, by Henriques herself. These exchanges, taut and confessional, form the film’s spine, while interwoven flashbacks peel back the sleek veneer of Madoff’s world to reveal the rot festering beneath.

Yet Levinson’s gaze is not transfixed by the technicalities of the crime; it turns inward, towards the emotional wreckage it leaves behind — Ruth Madoff (a magnificent Michelle Pfeiffer), and the couple’s sons, Mark (Alessandro Nivola) and Andrew (Nathan Darrow), whose moral bewilderment and filial anguish give the story its tragic dimension. Their slow descent from disbelief to despair, culminating in Mark’s devastating suicide two years after his father’s arrest, lends the film its most shattering emotional resonance.

The Wizard of Lies is not a courtroom spectacle nor a financial procedural; it is a requiem for integrity. Levinson refrains from depicting Madoff as a frothing villain or a cunning Machiavelli. De Niro’s portrayal is subtler — a study in chilling detachment. His Madoff is eerily composed, bureaucratic in his wickedness, and so serenely rational in his moral collapse that the viewer is left aghast at his tranquillity.

Pfeiffer, in turn, is extraordinary. Her Ruth is at once dignified and desolate — a woman watching her social world, her marriage, and her very sense of self disintegrate before her eyes. The sons, meanwhile, are portrayed with heartbreaking sincerity, their torment mirroring our own incredulity: how could paternal affection and monumental deceit coexist so comfortably within the same man?

Visually and tonally, Levinson mirrors this emotional frost. The muted colour palette, antiseptic interiors, and chilling stillness evoke a psychological winter — a home frozen by betrayal. The director’s choice of restraint over melodrama gives the film its potency; silence becomes the loudest scream.

De Niro’s performance ranks among his finest late-career triumphs. Stripped of histrionics, he crafts a portrait of evil that is disturbingly plausible — a man whose moral rot is hidden behind impeccable suits and polite conversation. Pfeiffer matches him beat for beat, her descent from hauteur to humiliation rendered with exquisite pathos.

The decision to cast Henriques as herself imbues the film with an air of journalistic authenticity, blurring the boundary between reportage and dramatization. Levinson’s direction, almost clinical in its detachment, transforms the narrative into a psychological autopsy — not of how Madoff deceived the world, but why he found it so easy to do so.

Indeed, the film’s moral sting lies in its refusal to provide tidy answers. Madoff’s protestations of solitary guilt sound hollow, and Levinson subtly hints at the complicity of a system that preferred comfort over scrutiny, and willful blindness over inconvenient truth.

The victims — the thousands of investors, retirees, and charities whose lives were upended — remain largely offscreen, an omission that is neither accidental nor evasive. By keeping the camera fixed on the Madoffs’ implosion, Levinson underscores his central thesis: that the most corrosive lies are not those told to strangers, but those whispered within the sanctity of one’s home.

Ultimately, The Wizard of Lies is less an exposé of financial crime than a tragic anatomy of moral failure. It is a tale of self-deception masquerading as ambition, of familial love poisoned by hubris. De Niro and Pfeiffer deliver performances of rare restraint and gravitas, while Levinson directs with a surgeon’s precision — slicing through the glossy façade of wealth to expose the vacuity beneath.

The result is a film as haunting as it is human — a sombre elegy to trust betrayed, and a stark reminder that the most ruinous bankruptcies are not financial, but moral.