Appointment of independent director in a psu
Din Dayal
(Querist) 16 July 2013
This query is : Resolved
A central ministry,appointed Mr X as addl director in a PSU board in NOV 2010 for 3 yrs. Appointment was to be confirmed in next AGM in Sept 11.Mr X however resigned on personal grounds just before start of AGM and accordingly ceased to be director from date of AGM. 8 days later he wrote to ministry seeking withdrawl of his resignation and continuation as director .Ministry agreed & directed company accordingly.
In my opinion ,his reappointment byepasses the AGM & is only a back door entry to the board and is not legal.Will some of the experts comment ?
Setu Niket
(Expert) 17 July 2013
When was the resignation withdrawn? after AGM or before AGM?
KIRAN AMARPURI
(Expert) 17 July 2013
When an additional director is apptt between two AGMS, his apptt must be confirmed in the next AGM otherwise he wont be treated as director on the Board. As I understood from your querry, he resigned before AGM and again he withdrawn his resignation after AGM which means that his apptt was not confirmed in the AGM. If this is the case then his resignation must be filed and if he is apptt again, his apptt in form 32 should be filed again otherwise he is no more a director because additional director cease to be a director at the Annual General Meeting if his apptt is not regularised.
Din Dayal
(Querist) 17 July 2013
Following information furnished as desired by M/S Niket & Amarpuri.
AA) He resigned on date of AGM , just before the start of the meeting.Hence the resolution on his confirmation was not taken up in the meeting . He withdrew his resignation 8 days after AGM was held.
BB)I am not aware whether his resignation was filed or not .But he was reappointed again as addl. director to be regularsid in next Agm , which was done in Sept 12.
Is it not a back door entry ?? Any remedies??
KIRAN AMARPURI
(Expert) 18 July 2013
When an addl director's apptt is not confirmed in the AGM, it means he is no more a director. If he is apptt again in Sept 12 as addl director, you cannt say it back door entry. A person can resign from the Board on one and next day he can again be apptt as addl director. I hope I am able to answer your question. In case of any doubt, let me know. CS KIRAN AMARPURI.
