RoC fines V-Guard MD over appointment, retirement related rules violation
Section 152 (6) of the Companies Act governs the appointment and retirement of directors in Indian companies.
The Managing Director of V-Guard Industries, a manufacturer of electrical and home appliances, has been fined by the Registrar of Companies (RoC) over violation of rules and regulations related to retirement and appointment of directors on the board.
The RoC Ernakulam has imposed a penalty of Rs 2.03 lakh on V-Guard Industries Managing Director M K Chittilappilly for violation of Section 152(6) of the Companies Act over an application filed by the company suo moto.
“The Managing Director has received an Adjudication order from RoC, Kerala imposing penalty under Section 159 of the Act for default under Section 152(6) of the Act,” the company said in a regulatory filing.
Section 152 (6) of the Companies Act governs the appointment and retirement of directors in Indian companies.
It mandates the retirement of all directors at Annual General Meetings (AGMs). One-third of rotational directors should retire each year, but the number may vary depending on the total directors’ count.
However, RoC in the order passed on August 19 noted that as on April 1, 2022, V-Guard board consisted of optimum number of executive and non-executive directors with more than 50 per cent non-executive independent directors, which comprised 2 executive directors, 6 non-executive independent directors.
“Out of the 2 executive directors, one director is from promoter category who is designated a Managing Director, and the other is in the professional category under the designation of Director & Chief Operating Officer. The office of the Managing Director is not liable to retire by rotation,” it said.
Of the remaining 2 directors liable to retire, the non-executive non-independent director opted out of the offer for re-appointment and retire on the date of AGM, held on July 28, 2022.
“The remaining one executive director retired by rotation and was reappointed at the 26th AGM. This resulted in the violation of Section 152 of the Act,” the order said.
Later, to comply with the provisions of the Act, V-Guard in their meeting on May 30, 2023 appointed an Additional Director, who is liable to retire by rotation.
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First Published: Aug 27 2024 | 10:42 PM IST