Nominee Directors as Independent Directors

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Prathamesh (Querist)
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26 May 2010 "Nominee directors appointed by an institution which has invested in or lent to the company shall be deemed to be independent directors" - my question is -

The FI who appoints Nominee Director vests financial interest in the said company.. then how could he be called an Independent Director?

CA.Amit Revankar

CA.Amit Revankar (Expert)
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27 May 2010 the role of nominee director is very much restricted as compare to regular director For eg regular director are responsible to maximise the wealth of sharholder keeping in view all statutory requirement as against nominee director is responsible to ensure that loan extended by the concerned FI is properly utilised to protect the interest of concerned FI. Furthur he is like an auditor who checks the acts of regular director to ensure that they r in interest of concerned FI.
Furthur regular director are managing the money of others in fudiciary position, Whereas incase of nominee director he is protecting his own money as an agent of FI

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Prathamesh

Prathamesh (Querist)
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27 May 2010 Thanks sir :)

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