Appointment of alternate director by Independent Director

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 January 2011 Hi,

As per listing agreement, our com., has to appoint independent directors on its subsidiary co., Now this independent director wants to appoint an alternate director, who is not independent because he is employee of the Company. Is this legally possible. Any violations, pl clarify

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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09 January 2011 Alternate director may be appoited in this case in absence of independent director. The responsibility for all the decesion will rest on independent director.

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Jayashree S Iyer

Jayashree S Iyer (Expert)
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10 January 2011 Whether he is an independant director or a nominee director as you say that he is not independent because he is employee of the company.

In he is an independent director he can appoint an alternate director. In case of nominee director, the company who has appointed a nominee director should appoint an alternate director in place of the original director appointed by them to act during the absence of original director.

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udit sharma

udit sharma (Expert)
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10 January 2011 As per clause 49(III)of the Listing Agreement, a Listed Holding Company has to appoint an Independent Director from its BOD on the Board of a material unlisted Indian subsidiary.

In case the Independent Director so appointed on the BOD of Material Unlisted Indian Subsidiary wants to appoint an Alternate Director to him, the person to be appointed as an Alternate Director must be an Independent Director.

The person proposed to be appointed as Alternate Director to an Indepedent Director cant be treated as Independent as he is an employee of the Company and so he cant be appointed as an Alternate Director to the Independent Director.

Regards

CS Udit Sharma

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