LEGAL OPINION ON TERM OF MR. X AS A DIRECTOR OF BANK 1.

Mr. Z

Address….

Dear Sir,

RE: LEGAL OPINION ON TERM OF MR. X AS A DIRECTOR OF BANK 1.

We refer to your letter dated 13.08.2006 on the above subject.

On perusal of your letter, it appears that the Mr. X has completed six years of his term as Director of Bank 1. You have sought our opinion on the following:

1.      Whether Mr. X will automatically cease to be a Director on the date of his completion of six years or would he be required to resign from the position of Director?

2.      If new Director is appointed, to fill up the casual vacancy of Mr. X, what will be the possible duration of the newly appointed Director and from which date will his tenure be calculated?

3.      Whether or not section 91(1)(c) of the Companies Act, 1994 will be applicable for the purpose of retirement of the newly appointed Director and in particular what will be the date of his first retirement?

Opinion

Regarding Question 1:

Whether Mr. X will automatically cease to be a Director on the date of his completion of six years or would he be required to resign from the position of Director?

Our Opinion:

According to Bank 2 BRPD Circular No.8 dated 26.04.06, Mr. X will automatically cease to be a Director of Bank 1on the next Annual General Meeting (i.e. the 24th Annual General Meeting). But according to section 15 kaka (1) of the Banking Company Act, 1991 no person other than the chief executive officer, by whatever name called, shall hold the office of director of a banking company for a period exceeding six years in two consecutive terms. As Mr X has already completed six continuous years as Director of Bank 1 on 20 August 2006, it is our suggestion that, in order to avoid legal complications, Bank 1should request Mr X to resign from the position of Director immediately.

Regarding Question 2:

If new Director is appointed, to fill up the casual vacancy of Mr. X, what will be the possible duration of the newly appointed Director and from which date will his tenure be calculated?

Our Opinion:

If a new Director is appointed by the Board to fill up the casual vacancy caused by the resignation of Mr. X, the new Director shall be subject to retirement at the same time as if he had become a Director on the day Mr. X was last re-elected, that is on 23 June 2005, as per section 91(1)(c) of the Companies Act, 1994. So if Mr. X is one of the Director to retire then the tenure of the new Director will be calculated from 23 June 2005 until the coming AGM. And then he can continue for another term of three years.

Regarding Question 3:

Whether or not section 91(1)(c) of the Companies Act, 1994 will be applicable for the purpose of retirement of the newly appointed Director and in particular what will be the date of his first retirement?

Our Opinion:

As stated above, we are of the opinion that section 91(1)(c) of the Companies Act, 1994 shall be applicable for the purpose of retirement of newly appointed Director. Referring to our opinion regarding question 2, the newly appointed Director will retire in coming AGM. if Mr. X would be required to retire in the said AGM.

Should you have any further query, do not hesitate to revert to us.

Thanking you.

Yours faithfully,

………………….

For: “The Lawyers & Jurists”

Disclaimer:

The information contains in this web-site is prepared for educational purpose. This site may be used by the students, faculties, independent learners and the learned advocates of all over the world. Researchers all over the world have the access to upload their writes up in this site. In consideration of the people’s participation in the Web Page, the individual, group, organization, business, spectator, or other, does hereby release and forever discharge the Lawyers & Jurists, and its officers, board, and employees, jointly and severally from any and all actions, causes of actions, claims and demands for, upon or by reason of any damage, loss or injury, which hereafter may be sustained by participating their work in the Web Page. This release extends and applies to, and also covers and includes, all unknown, unforeseen, unanticipated and unsuspected injuries, damages, loss and liability and the consequences thereof, as well as those now disclosed and known to exist.  The provisions of any state’s law providing substance that releases shall not extend to claims, demands, injuries, or damages which are known or unsuspected to exist at this time, to the person executing such release, are hereby expressly waived. However the Lawyers & Jurists makes no warranty expressed or implied or assumes any legal liability or responsibility for the accuracy, completeness or usefulness of any information, apparatus, product or process disclosed or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product process or service by trade name, trade mark, manufacturer or otherwise, does not necessarily constitute or imply its endorsement, recommendation or favouring by the Lawyers & Jurists. The views and opinions of the authors expressed in the Web site do not necessarily state or reflect those of the Lawyers & Jurists. Above all, if there is any complaint drop by any independent user to the admin for any contents of this site, the Lawyers & Jurists would remove this immediately from its site.