11 June 2021
who neither himself nor any of his relatives- is or had been employee of the co . in any of 3 fy immediately preeceding the fy in which i.d is proposed to be appointed. provided in case of relative who is emplyee the restriction under this clase shall not apply during 3preecding 3 fy.
my dobut is... in first para it says for 3 fy relative shall not be associated as employee of co, and in 2nd para it allows those relatives who are associated as employee during 3 pfy.
dear members plz...help me with correct interpretation.
08 July 2021
Please go through below explained scenarios to understand: Case-1: The proposed candidate for independent director himself was an employee- Then the rule of preceding 3 financial year applies Case-2: The proposed candidate is having a relative who is working as an employee as on date of appointment- Then he doesn't qualify to become an independent director because his relative is an employee as on that date Case-3: Proposed candidate's relative was working as an employee assume in the previous year but currently not working there- Then in such case he is eligible to be appointed as an independent director. Because rule of 3 preceding financial year doesn't apply in case of relative, being an employee. Also to clarify further in the section 149(e)(ii) the term used "is" or "has" but by mistake you have read it as "had" hence the confusion. Hope it clarifies your doubt
CAclubindia
