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Wary independent directors ringfence assets; transfer to trusts, kin

Several directors ET spoke to said they are consulting top lawyers to protect assets from personal liabilities. Scope of Section 212 of the Companies (Amendment) Act, 2019 has been expanded and the Centre may file an application before NCLT for holding ‘any director’ personally liable without any limitation of liability.
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20 Sep 2020 1 Mins Read 0 comment
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Mumbai: Several independent directors have begun ringfencing their assets by transferring titles to trusts or family members, to safeguard their interests in case of any acts of financial mismanagement or fraud by the company, promoter or management of boards they sit on. Several directors ET spoke to said they are consulting top lawyers to protect assets from personal liabilities.
from every possible claim made while serving on a board, said Huzefa Nasikwala, founding partner, Nasikwala Law Office. Dr Neeti Shikha, member of the academic advisory council at Indian School of Public Policy, said, “If the independent directors have some impetus like Esops or term-linked monetary incentive then only we can increase more participation of independent directors.”
Mumbai: Several independent directors have begun ringfencing their assets by transferring titles to trusts or family members, to safeguard their interests in case of any acts of financial mismanagement or fraud by the company, promoter or management of boards they sit on. Several directors ET spoke to said they are consulting top lawyers to protect assets from personal liabilities. from every possible claim made while serving on a board, said Huzefa Nasikwala, founding partner, Nasikwala Law Office. Dr Neeti Shikha, member of the academic advisory council at Indian School of Public Policy, said, “If the independent directors have some impetus like Esops or term-linked monetary incentive then only we can increase more participation of independent directors.”

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