Independent Directorship in Holding and Subsidiary at the same time!!

[Deepesh Nayak]

Good Evening friends,

Can a person be appointed as independent director at the same time in Holding and Subsidiary Company??? Criteria of independence as given in section 149(6) and listing agreement is as follow:

"who is not related to promoters or directors in the company, its holding, subsidiary or associate company"

Whether word related is limited to only relatives as defined under section 2(77)??

Please confirm.

Deepesh

[Mohit Mahana]

Yes ur interpretation is correct..

Regards,

CS Mohit Mahana

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[Deepesh Nayak]

Dear Mohit Sir,

So can we appoint him as ID at the same time in both the companies??

Thanking you,

*CS Deepesh Kumar Nayak*
 Company Secretary

 *Mob. 097134-80215*
*csdeepe...@gmail.com*

[Mohit Mahana]

Yes

Regards,

CS Mohit Mahana

[Deepesh Nayak]

Sir, i am still bit confuse that how an independent director can be held such position in same group, however after careful reading of definition of independent director and criteria of independence he is eligible but i think there is something hide and lapse and according to me there is some thing in the act which restricts for the same but i am unable to get it find.

Please suggest further on the same.

Regards,
Deepesh

Thanking you,

*CS Deepesh Kumar Nayak*
 Company Secretary

 *Mob. 097134-80215*
*csdeepe...@gmail.com*

[Deepesh Nayak]

Sir, kindly also confirm if a person is independent director in both the holding and subsidiary company whether he will be treated as related party ??? or that independent director will be treated as related for any contract shall be held between holding and subsidiary company??

Thanking you,

*CS Deepesh Kumar Nayak*
 Company Secretary

 *Mob. 097134-80215*
*csdeepe...@gmail.com*

[Rakhi Singh]

Dear,

as per my understanding ..u can not appoint same director in holding and in subsidiary company ..reason being in some extant he is related to the Holding company  or you can say he is indirectly related to holding company. there is director interest which can be attached.

others view are most welcomed. 

Thanks & Regards,

 Rakhi Singh

Company Secretary

NKG Infrastructure Limited

CIN-U74899DL1989PLC038371

Tel-+91-11-23413731

Fax-+91-120-4537458

Mob# - +919990664838

[CS Shainshad Aduvanni]

ID does not have any material pecuniary relationship and only eligible for Sittings (some times commission)

So they are not related party to any transaction.

Regards

CS Shainshad Aduvanni
Company Secretary
Coimbatore

09841414439

[Deepesh Nayak]

But he become related because of transaction being held between holding and subsidiary companies.

And what about the principles of independence??

Deepesh

 
On 01-Jun-2014 8:10 AM, "CS Shainshad Aduvanni" <csupt...@gmail.com> wrote:
>
> ID does not have any material pecuniary relationship and only eligible for Sittings (some times commission)
>
> So they are not related party to any transaction.
>
> Regards
>
>
> On 29 May 2014 16:47, Deepesh Nayak <csdeepe...@gmail.com> wrote:
>>
>> Sir, kindly also confirm if a person is independent director in both the holding and subsidiary company whether he will be treated as related party ??? or that independent director will be treated as related for any contract shall be held between holding and subsidiary company??
>>
>> Thanking you,
>>

>> *CS Deepesh Kumar Nayak*
>>  Company Secretary
>>  *Mob. 097134-80215*
>> *csdeepe...@gmail.com*
>>
>>
>>
>> On Thu, May 29, 2014 at 1:16 PM, Deepesh Nayak <csdeepe...@gmail.com> wrote:
>>>
>>> Sir, i am still bit confuse that how an independent director can be held such position in same group, however after careful reading of definition of independent director and criteria of independence he is eligible but i think there is something hide and lapse and according to me there is some thing in the act which restricts for the same but i am unable to get it find.
>>>
>>> Please suggest further on the same.
>>>
>>> Regards,
>>> Deepesh
>>>
>>>
>>>
>>> Thanking you,
>>>

>>> *CS Deepesh Kumar Nayak*
>>>  Company Secretary
>>>  *Mob. 097134-80215*
>>> *csdeepe...@gmail.com*
>>>
>>>
>>>
>>> On Wed, May 28, 2014 at 5:41 PM, Mohit Mahana <csmaha...@gmail.com> wrote:
>>>>
>>>> Yes
>>>>
>>>> Regards,
>>>>
>>>> CS Mohit Mahana
>>>>
>>>>
>>>>
>>>> On Wed, May 28, 2014 at 5:39 PM, Deepesh Nayak <csdeepe...@gmail.com> wrote:
>>>>>
>>>>> Dear Mohit Sir,
>>>>>
>>>>> So can we appoint him as ID at the same time in both the companies??
>>>>>
>>>>>
>>>>>
>>>>> Thanking you,
>>>>>

[K Degaleeswaran]

Sir,

In my view if ID of holding company gets sitting fee it will amount to pecuniary relationship with holding company (materiality of pecuniary relationship is not a matter because acts says only "pecuniary relationship" not as "material pecuniary relationship", so it will violate sec.149(6)(c).  and 

Sec.149(6)(b)(ii) restrict appointment of relative of director..assume it applicable  for ID also.

Hence in my view same person cannot be ID for both Holding and Subsidiary Company. 

Please share your views to get more clarity.

Thanks

K Degaleeswaran

[Deepesh Nayak]

Thanks Mr. K Degaleeswaran sir,

Actually, apart from getting director sitting fees, the Holding and Subsidiary Companies have some contractual relations and being business to each other. Holding Company also appointed its some directors on the board of subsidiary company who have been considering as related parties since inception.

For, sitting fees, its not comes under the pecuniary relationship because law excludes specifically.

According to me there is only criteria of contractual relationship between H and S which affect his independence, hence he should not consider as independent director for both the company.

Others views are welcome.

Deepesh

Thanking you,

*CS Deepesh Kumar Nayak*
 Company Secretary

 *Mob. 097134-80215*
*csdeepe...@gmail.com*