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Commission to a Company where Directors brother has interest

Mohan Kumar (Company Secretary) (62 Points)

13 October 2009

Friends,

I have a query and look forward to your help.

A Limited is an Indian listed Company. It has a contract with X Limited and X Limited (Foreign company) will procure contracts for A Limited (Indian Listed Company) and X Limited will be paid a commission for the same.

K is a Director of the Indian Listed company. His brother is a Director in the Foreign COmpany rendering service and taking commission.

I understand that Sec. 297 is not attracted as the transaction is between an Indian Company and Foreign company. Do we need to do any other compiance in this regard, being the Indian Company is a listed Company?

Please share your thoughts.

Regards

Mohan

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2 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 13 October 2009

Disclosure of Interest by the director of Indian Listed Company under Section - 299 read with section-300 is applicable in your case.

Regards

VIMAL (ASSISTANT MANAGER FINANCE) (58 Points)
Replied 28 November 2009

Further as Sec 299 and 300 is applicable while discussing the matter K Should not be counted while decideing quorum. In case the disclosure is not made then Mr K will be holding the office of profit. Further non disclosure would also invalidate the procedding of the meeting.