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Independent director can’t be held guilty for company’s fault: IMC

Independent director can’t be held guilty for company’s fault: IMC
PTI
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First Published: Thu, Jan 08 2009. 01 07 AM IST
Updated: Thu, Jan 08 2009. 01 07 AM IST
Mumbai: Indian Merchants Chamber (IMC) said today independent directors cannot be held accountable and criminally liable for offences committed by companies, unless there is an evidence to that effect.
Responding to “international look out” notice issued by the Andhra Pradesh government against JM Financial Managing Director Nimesh Kampani, IMC President M N Chaini said “It is ridiculous to hold the non-executive Independent Directors guilty for the wrongdoings of the full-time executive directors, who are hands-on with the day-to-day administration of the companies.”
He criticised the notice issued by the Andhra Police against Kampani in a case involving defaulting on repayment of deposits worth about Rs 100 crore by the Hyderabad-based NBFC Nagarjuna Finance.
The police have sought to hold Kampani liable for the corporate malfeasance because he was an Independent Director on the Nagarjuna board even though he resigned as director long ago.
The IMC chief asked the Centre to amend the relevant provisions of the various Acts to insulate the independent directors against the criminal and other liabilities ensuing from the wrong-doings of their corporates.
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First Published: Thu, Jan 08 2009. 01 07 AM IST