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CS Professional · Compliance Management, Audit and Due Diligence · Non-Compliances, Penalties and Adjudications

A prosecution against Lotus Pharma Ltd and its CFO is pending in court. The Regional Director then compounds the offence. What must follow under the Act?

The Registrar must bring the compounding in writing to the notice of the court where the prosecution is pending, and on such notice the company and its officer are discharged. The company must also intimate the Registrar within seven days of the compounding.

  1. AThe Registrar brings the compounding in writing to the court's notice, and the company and officer are dischargedCorrect
  2. BThe court must continue the trial until it passes judgment
  3. CThe shareholders must separately withdraw the complaint
  4. DThe company need not inform the Registrar since the court is seized

Explanation

Section 441(3)(d) provides that where compounding follows institution of prosecution, the Registrar brings it in writing to the court's notice and the company or officer is discharged. Section 441(3)(b) also requires the company to intimate the Registrar within seven days of compounding, so the last option is wrong.

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