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Independent Director S.149

Sudhakar G (32 Points)

04 June 2021

Can Independent Director be continued as Non-Executive Director (NED)in the same company after he being disqualified ?

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8 Replies

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 05 June 2021

Disqualified means disqualified due to fraud. There might not be why entitlements.

Sudhakar G (32 Points)
Replied 05 June 2021

Assume disqualification not for fraud but failing to fulfill 149(6) criteria

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 05 June 2021

who, neither himself nor any of his relatives—
(i) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed;

I am busy and no time read, at a glance, I found out he cannot continue because of the above as the independent director definition is:

An independent director in relation to a company, means a director other than a managing director or a whole-time director or a nominee director,—
⁴[(a) who, in the opinion of the Board, is a person of integrity and possesses relevant expertise and experience;]

(b) (i) who is or was not a promoter of the company or its holding, subsidiary or associate company;

(ii) who is not related to promoters or directors in the company, its holding, subsidiary or associate company;
⁵[(c) who has or had no ¹²[pecuniary relationship, other than remuneration as such director or having transaction not exceeding ten per cent. of his total income or such amount as may be prescribed,] with the company, its holding, subsidiary or associate company, or their promoters, or directors, during the two immediately preceding financial years or during the current financial year;]