Appointment of MD

Originally posted by :Pankaj Sachar


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My query is that a public company A is having Executive Director who is not drawing any salary from the Company A. He is also a business head of International Company B which is A SUBSIDIARY of Company A located outside India and is drawing a salary from B. Now a company A proposes to appoint him as MD.He would be devoting full time & attention in the development of International business, and his presence which in general will be outside India and very less in India. He was not in India last year.
He will not be getting remuneration from A & will continue drawing salary from International company B.
Keeping in view the above facts, we understand that provisions u/s 309 (6) and particularly conditions mentioned in part 1 (e) of schedule XIII of Companies Act, places restriction in appointment of MD in the above mentioned scenario.
 
Being the MD is it justified if he is not getting any remuneration from Company A

Request to give some suggestions or thoughts in this matter that whether such appointment can be made under Companies Act.
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This is In continuation of my earlier reply to your query. I think that with the approval of the Central Government you can appoint him as MD. This is because you will not be satisfying the conditions laid down under Schedule XIII of the Act.

Thanks. Please reply if being the MD is it justified if he is not getting any remuneration. Should the company enter into an agreement with the MD in such case?