V-Guard Industries Managing Director Fined For Violation Of Director Appointment Rules

The managing director of V-Guard Industries has been fined by the Registrar of Companies for breaching regulations related to the retirement and appointment of directors.

The RoC Ernakulam has levied a penalty of Rs 2.03 lakh on M K Chittilappilly for violating Section 152(6) of the Companies Act, following a self-reported application from the company.

According to a regulatory filing by V-Guard Industries, the adjudication order received from the RoC Kerala highlights the breach under Section 159 of the Act for defaulting on Section 152(6).

Section 152(6) mandates that all directors must retire at annual general meetings, with one-third of rotational directors retiring each year. The exact number of retiring directors may vary based on the total board composition.

The RoC’s order, dated Aug. 19, observed that as of April 1, 2022, V-Guard’s board comprised two executive directors and six non-executive independent directors, with over 50% being non-executive independent directors. The MD is not subject to retirement by rotation.

The order noted that of the two directors required to retire, one non-executive non-independent director chose not to seek re-appointment and retired at the AGM held on July 28, 2022. The remaining executive director, who was eligible for rotation, retired and was reappointed at the 26th AGM, resulting in a breach of Section 152.

To rectify this, the electrical and home appliances company appointed an Additional Director, who is subject to retirement by rotation, during a board meeting on May 30, 2023.

(With Inputs from PTI)