Gayathri (company secretary) (83 Points)
15 February 2011Friends,
Please clarify this:
Mr.A is a director in X ltd and also in Y Ltd. Mr.A has no shareholding in both the Companies.
Being an interested Director, is it required for him to make disclosure under Section 299 of the Companies Act for any contract or arrangement entered into or can he claim exemption under Section 299(6) stating that he has no shareholding in the Company??
Thanks in advance.
Regards
nidhigoel89
(Company Secretary )
(594 Points)
Replied 15 February 2011
Hello!
As per my views sec 299 (6) talks abt each director of a co. that they dnt hold shares more than 2%. in other co. So, u cant take only Mr. A's shareholding u have to take the shareholding of other directors too in the other co. And as per that decide ur case.................
Contary views are welcomed.
Regards
Nidhi
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 15 February 2011
A general notice is to be given under section 299(3).
Gayathri
(company secretary)
(83 Points)
Replied 15 February 2011
Ankur Sir,
Section 299(3) talks about general disclosure i.e yearly disclosure relating to list of companies in which he is a director.
But my query relates to any contract or arrangement entered into between two companies in which Mr.A is a common director.
Please give your views.
Preet Kanwar Singh
(Company Secretary)
(161 Points)
Replied 15 February 2011
In this case, section 299(6) is irelevant.Since he is a director in both the companies he has to make adequate disclosure to the Board of Company.
The exemption can be claimed only if he is director of say A company and also shareholder in company B not a director and his holding in co. B is less than 2%.
experts view r welcomed.....
Pothuganty sudheer
(Consultant, C.A, C.S)
(411 Points)
Replied 15 February 2011
I agree with Preet's view. Though A does not become interested by virtue of shareholding , but becomes interested by virtue of
directorship and so he cannot claim exemption under 299 (6) and not relevant in the instant case and hence the disclosure
needs to be made.
Experts views are welcome.
CAclubindia
