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Business News/ Companies / News/  Cos with no woman director under lens
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Cos with no woman director under lens

The Companies Act mandates every listed company and every public limited company with paid-up capital of ₹100 crore or more, or sales of ₹300 crore or more, to have at least one woman director.

Authorities have already taken up the matter with several companies, and in some cases, notices are about to be issued.Premium
Authorities have already taken up the matter with several companies, and in some cases, notices are about to be issued.

NEW DELHI : Companies defaulting on the regulatory requirement to have at least one woman on their boards are attracting the attention of authorities, two persons aware about the development said. The Companies Act mandates every listed company and every public limited company with paid-up capital of 100 crore or more, or sales of 300 crore or more, to have at least one woman director. They also have to fill up intermittent vacancy of the woman director diligently.

Several companies, including state-owned ones under the jurisdictions of Registrars of Companies (RoCs) in Delhi, Kanpur and Bihar, have been found to be in default, one of the two people cited above said on the condition of anonymity. Authorities have already taken up the matter with several companies, and in some cases, notices are about to be issued.

At least 20 show-cause notices were issued to defaulting companies in 2022 in the Delhi region alone, the person cited above added.

Of the 61 companies under the jurisdiction of the RoC in Bihar, which are required to appoint at least one woman director, only 29 have complied and 32 companies were found to be defaulters, the second person said. The defaulters include seven state-owned enterprises. Three of them are in the power sector and one is in the infrastructure sector, the person added.

Defaulters are liable to pay fines that may be imposed on the company and each of the officers in default. The penalty is capped at 300,000 in the case of the company and at 100,000 in the case of the defaulting officers. Emails sent to the ministry of corporate affairs and to the chief secretary of Bihar Amir Subhani on 7 March seeking comments remained unanswered at the time of publishing.

Gender equality is one of the sustainable development goals that India has committed to achieve by 2030, but information available with the ministry of corporate affairs shows that only 31% of the total 281,920 director identification numbers (DINs) issued in the April-December period of 2022, went to women. DIN is a key requirement for individuals to take up board positions.

Lack of awareness is one of the probable reasons for defaulting on this requirement, said the first person quoted above. “In some cases, it is lethargy," said the person.

Deloitte Touche Tohmatsu India LLP said in February 2022 citing Deloitte Global’s Women in the boardroom report that women hold 17.1% of the board seats in India, while globally, 19.7% of the board seats were held by women.

The number of women directors on board of companies in India has improved from their level in 2013 when the Companies Act of 2013 mandated having one woman member on board, Deloitte said.

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ABOUT THE AUTHOR
Gireesh Chandra Prasad
Gireesh has over 22 years of experience in business journalism covering diverse aspects of the economy, including finance, taxation, energy, aviation, corporate and bankruptcy laws, accounting and auditing.
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Published: 14 Mar 2023, 11:16 PM IST
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