Company Secretary
2303 Points
Joined October 2010
Hi..
Yes a Statutory Auditor(Only a Practicing Chartered Accountant and not a firm of Chartered Accountants practicing in India) of the Company can be appointed as Director of its Holding Company as only an Individual can be appointed as Director of the Company.
But i am of the opinion that he should not be appointed as such in view of the following points,
1. After being appointed as a Director of the Company, he will not be able to exercise his independent judgement on the financial statements of the Subsidiary Company in his capacity as its Auditor. In my opinion an Auditor should be in a position to express his independent views on the financial results of the Company in his report to the members of the Company and his views should be free from any kind of influence. Being a Director of the Holding Company, his independence as Auditor of the Company might be effected.
2. Secondly with respect to compliance part, the Holding Company will have to cpmply with the provisions of section 314 of the Companies Act, 1956 as the Director will be said to be holding an office or place of profit in its Subsidiary Company.
In my opinion, there is no statutory restriction regarding the appointment of Statutory Auditor of Subsidiary Company as Director of Holding Company, but he should not beso appointed in view of the above cited reasons which are my personal opinion and the independence of the Auditor may be questioned in the future.
Let us wait for the view of other eminent experts:-)
God Bless
Udit Sharma