TaxTMI 
TaxTMI 
Clarification on prosecutions filed or internal adjudication proceedings initiated against Independent Directors, non-promoters and non-KMP non-executive directors
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.... Shastri Bhawan, Dr. R.P. Road, New Delhi Dated: 2^nd March, 2020 To, All Regional Directors, All Registrars of Companies, All Official Liquidators. Subject: Clarification on prosecutions filed or internal adjudication proceedings initiated against Independent Directors, non-promoters and non-KMP non-executive directors - reg. Sir, Under several provisi....
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....aintenance, filing or distribution of accounts or records is submitted in e-form GNL-3 by a person under the immediate authority of the Board or any KMP, the liability of such person will arise. However, in certain cases, the penal provisions in the Act hold a specific director, or officer, or any other person accountable for the default, in such cases, action should be initiated only against such....
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....promoter and non-KMP, NEDs, would exist in the following cases: a) Directors nominated by the Government on the public sector undertakings; b) Directors nominated by Public Sector Financial Institutions, Financial Institutions or Banks having participation in equity of a company, or otherwise; c) Directors appointed in pursuance to any statutory or regu....
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.... documents may be sought so as to ascertain the involvement of the concerned officers of the company. In case, lapses are attributable to the decisions taken by the Board or its Committees, all care must be taken to ensure that civil or criminal proceedings are not unnecessarily initiated against the IDs or the NEDs, unless sufficient evidence exists to the contrary. 6. The records availa....