Managerial remuneration_URGENT

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A public company has paid to its MD, remuneration in excess of what is provided in schedule XIII. The statutory auditor has issued a qualified report on this point. The company cannot take back the amount given to the MD. The person is no longer an MD of the company.

What would be the consequence of the aforesaid violation in terms of fine, etc. from company's and directors perspective? What would be the way forward - getting approval from Government regarding waiver, etc.? Will compunding of offence help in this situation?

 

Replies (2)

Please refer to section 269(6) to 269(11).

As far as recovery of money, I think the company has to file a suit for recovery. There is no prohibition for Compounding action. 

THanks a lot for your reply. But I am not clear on one point. Section 269 says about contravention in case of appointment. My case is contravention in case of remuneration. I feel the applicable section is 309(5A) & (5B) but i am unable to find the penal consequences.

And the company even does not intend to recover the money. What can be the way forward in such a case?

Thanks once again for your time and effort

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