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Demise of director-requesting urgent reply

Mrs.n (CS, LL.B ) (407 Points)

31 May 2012

Dear all

There is a death of independent director in listed company.

my query --

1) within how much time we have to appoint the director in his place ?

2) which section is applicable ?

pls suggest asap.

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2 Replies

prakash (Company Secretary) (1352 Points)
Replied 31 May 2012

As per clause 49 1 (A),

i)The Board of directors of the company shall have as optimum combination of executive and non-executive directors with not less than fifty percent of the board of directors comprising of non-executive directors.

ii) Where the Chairman of the Board is a non-executive director, at least one third of the Board should comprise of independent directors and in case he is an executive director, at least half of the Board should comprise of independent directors.

if your company has sufficient independent directors as per clause 49 1(A) (ii) after demise of independent director, it is not manadatory to appoint independent director. Appointment of indepenent director should take place immediately if there are no sufficient independent directors in your company as per clause 49 1 (A) (ii) after demise.

As per my knowledge there is no specific section deals with it either in companies act or Listing agreement.

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Mrs.n (CS, LL.B ) (407 Points)
Replied 31 May 2012

Thanks for the reply..

In our case composition is not sufficient , we need to apooint someone in replacement..so should we need to replace him immediately but our board meeting was on the very next day after his death so in that case we can only appoint in our next board meeting which is in august.as per practice of our company we are very specific about holding board meeting (only required i.e 4 in year) .

till that time , how we can ensure compliance of listing agreement. is there any violation for non appointing director between may and august.

please help

Pls suggest.