Corporate lawyers, CAs hit out at Satyam's independent directors for quitting
Resignation of four independent directors from the Board of Satyam Computers came in for criticism today from corporate lawyers, company secretaries and chartered accountants, who raised the issue of 'fiduciary duties' of such nominees.
By PTI |
NEW DELHI: Resignation of four independent directors from the Board of Satyam Computers came in for criticism today from corporate lawyers, company secretaries and chartered accountants, who raised the issue of 'fiduciary duties' of such nominees.
"By resigning, they (independent directors) failed in their fiduciary duty to protect the interest of shareholders and other stakeholders, whose interest they represent on the Board," said senior partner of the law firm Titus and Co Diljeet Titus while commenting on the decision of the four independent directors to quit the company.
"In the present scenario, the Board meeting would not be able to take crucial decision on buyback of shares," President of Institute of Chartered Accountants of India Ved Jain said.
Resignation of the directors on the fiasco over acquisition of two companies promoted by Satyam Chairman B Ramalinga Raju's sons would make the Board meeting of the company on January 10 a farce, said a Company Secretary.
However, an official in the Ministry of Corporate Affairs said that the meeting can, of course, take place but not before appointment of new independent directors, approved by the shareholders. Without wanting to be named, he said there was nothing wrong with the resignation of the independent directors, as "they might not be feeling comfortable".
But Company Law practitioner Naseer Ahmed said, "Prima facie, they are accepting the wrong which had happened at the Satyam's Board meeting... They should not run away from their collective decision and responsibility...it also appears that they are influenced by some vested groups in the company."
Advocate Vibhu Bakhru, who practices with the Company Law Board, said the law makers had not made any distinction between promoter directors and independent directors. "It's not a case of joint liability but that of several liability of each director," he added.
"By resigning, they (independent directors) failed in their fiduciary duty to protect the interest of shareholders and other stakeholders, whose interest they represent on the Board," said senior partner of the law firm Titus and Co Diljeet Titus while commenting on the decision of the four independent directors to quit the company.
"In the present scenario, the Board meeting would not be able to take crucial decision on buyback of shares," President of Institute of Chartered Accountants of India Ved Jain said.
Resignation of the directors on the fiasco over acquisition of two companies promoted by Satyam Chairman B Ramalinga Raju's sons would make the Board meeting of the company on January 10 a farce, said a Company Secretary.
However, an official in the Ministry of Corporate Affairs said that the meeting can, of course, take place but not before appointment of new independent directors, approved by the shareholders. Without wanting to be named, he said there was nothing wrong with the resignation of the independent directors, as "they might not be feeling comfortable".
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But Company Law practitioner Naseer Ahmed said, "Prima facie, they are accepting the wrong which had happened at the Satyam's Board meeting... They should not run away from their collective decision and responsibility...it also appears that they are influenced by some vested groups in the company."
Advocate Vibhu Bakhru, who practices with the Company Law Board, said the law makers had not made any distinction between promoter directors and independent directors. "It's not a case of joint liability but that of several liability of each director," he added.
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