Sebi hearing

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 September 2011 A chairman of the listed company receives a notice from SEBI to appear for hearing. On receiving the notice the chairman immediately appoints his family solicitor to appear with him for the hearing.
The directors of the listed company have objected to both the chairman's upfront arrangement with his family solicitor and the chairman providing to lawyer the company documents for the purpose of the hearing.
In the given case,
1. Whether the objection of the directors is valid?
2. In the given circumstances will the lawyer able to obtain his retainer fees from the company?
3. Whether the chairman is at risk of potential liability for providing company documents to the lawyer?

CS Suraj Arora

CS Suraj Arora (Expert)
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30 September 2011 Dear

As far as my opinion is concerned the objection of the director has not any validity.because its implied authority of the chairman to protect the interest of the company in any way to present before the authorities.

further,Except matters specified in section 292 of the companies act 1956 there is no need to call board meeting for each and every purpose .

As far as lawyers fees is concerned then he will be entitle to the fees..as it is presumed by him that the chairman having authority form the company and now exception to the indoor management what is inside your company does not matter....

chairman is not liable any more for handing over the documents of the company for the general interest of the company.

i hope your query is solved.

Querist : Anonymous

Querist : Anonymous (Querist)

03 October 2011 Thanks for your reply.

However,What happens in the situation where there is no board resolution authorizing the chairman to appoint a lawyer?
In such a case will the chairman be liable of any potential risk for appointing the lawyer as well as providing him with the company documents?

Thanks

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