COMPANY SECRETARY WILL BE PUNISHED NOT MANAGING DIRECTOR, AND WHOLE-TIME DIRECTOR FOR DISTRIBUTING GIFTS OR CASH TO MEMBERS DURING GENERAL MEETINGS

MADRAS FERTILISERS LTD VS REGIONAL DIRECTOR MCA CHENNAI

BACKGROUND:

Madras Fertilizers Limited distributed State Bank of India (SBI) gift cards to minority shareholders during its 54th Annual General Meeting (AGM) held via video conferencing. This action contravened Clause 14 of Secretarial Standard-2 (SS-2), which prohibits the distribution of gifts or cash to members during meetings.

OUTCOME:

The Registrar of Companies (ROC), Chennai, imposed penalties on the company, its Managing Director, and Whole-Time Director for failing to adhere to secretarial standards as mandated by the Companies Act, 2013.

Upon appeal, the Regional Director emphasized that ensuring compliance with Secretarial Standards is primarily the responsibility of the Company Secretary. Consequently, the Company Secretary was held solely accountable for the violation.

COMPANY SECRETARY IN EMPLOYMENT SHOULD BE MORE VIGILANT AS IT HIS RESPONSIBILITY TO OBSERVE SECRETARIAL STANDARDS

R V SECKAR FCS,LLB 79047 19295

COURTESY Shri Nikhil kumar Jha