Circumstances where one is disqualified to be appointed to, or continue to hold, office of director

(1) Any of the following persons shall not be eligible to be appointed to the office of the director:

(a) Who is below Twenty-one years of age, in the case of a public company;

(b) Who is of unsound mind or is insane;

(d) Who is convicted of an offense of corruption or of an offense involving moral turpitude?

Provided, that in the case of a private company, a period of three years has not lapsed from the date of such sentence,

(e) who is convicted of an offense of theft, fraud, forgery or embezzlement or misuse of goods or funds entrust to him/her, in an authorized manner, and sentenced in respect thereof, a period of three years has not elapsed from the expiry of the sentence;

(f) who has personal interest of any kind in the business or any contract or transaction of the concerned company;

(g) who is already a director, substantial shareholder, employee, auditor or adviser of another company having similar objectives or has personal interest of any kind in such company;

Provided, however, that such person of a private company may become a director of another private company having similar objectives.

(h) who is a shareholder that is held to have failed to pay any amount due and payable by him/her to the concerned;

(i) In the case of a person who has been sentenced to punishment pursuant to Section 160, a period of one year is not lapsed from the date of sentence, or in the case of a person who has been sentenced to punishment pursuant to Section 161, a period of six months has not lapsed after the date of sentence;

(j) In the event that the prevailing laws prescribed any qualification or disqualification in the case of a company carrying on any specific business, who does not possess such qualification or suffers from such disqualification;

(k) Who is already a director of any company which has not submitted such reruns and reports as required to be submitted to the Office under this Act, for any continuous three financial years;

(l) Who is holding the office of director receiving from another listed company any remuneration or facility, other than a meeting allowance and actual expenses to be in curried in coming to, going from, and staying in, the place of meeting.

(2) Any of the following persons shall not be eligible to be appointed to the office of an independent director:

(a) Who is a person as referred to in Sub-section(1);

(b) Who is a shareholder of the concerned company;

(c) Who has not obtained at least bachelor degree in a subject that is related to the business to be carried on by the concerned company and gained at least ten years of experience in the related field or in the company management affairs or who has not obtained at least bachelor degree in finance, economics, management, accounts, statistics, commerce, trade or law and gained at least ten years of experience in the related field;

(d) Who is an officer, auditor or employee of the concerned company or a period of three years has not lapsed after his/her retirement from any such office;

(e) Who is the close relative of the office of the concerned company;

(f) Who is an auditor of the concerned company or his/her partner?

(3) No person shall continue to hold the office of a director in any of the following circumstances;

(a) If one suffers from any disqualification for appointment to the post of director as mentioned in Sub-section (1) or (2);

(b) If the general meeting passes a resolution to remove him/her from the office of director,

(d) If one is held by a court to have done any act involving dishonesty or ulterior motive in the activities of the company;

(e) If one is held by a court to have done any act prohibited by this Act from being done by a director or to have failed to do any act required to be done under this Act;

(f) If one is blacklisted by a competent body pursuant to the prevailing law for his/her default in repaying a loan from any bank or financial institution, and the period of such blacklisting has not expired.

(4) Prior to holding any person to be disqualified for being appointed to the office of a director or holding such office, the company shall give information thereof to him/her and provide him/her with a reasonable opportunity to defend himself.