Sharing concerns of independent directors in the face of corporate frauds like Satyam and Nagarjuna Finance, the government today favoured immunity to such members in the Board provided they are not party to "wrong decisions".
Underscoring the need for instilling a sense of confidence among independent directors, a must clause for listing of any company on bourses, Corporate Affairs Minister Prem Chand Gupta told PTI that this issue was being addressed in the new Companies Bill that he had introduced in Parliament.
"As the Act stands today, there is no such thing called independent directors and there is no immunity," he said when queried if eminent people would be not be scared to join the boards of companies in view of the experience of Satyam and Nagarjuna Finance.
Stating that it was a genuine fear, Gupta said, "Independent directors (as per the provisions in the new bill that seeks to replace the Act of 1956) will not be held responsible for wrong doings of the company, if they are not party to that decision."
He was responding to a query on the minutes of the meeting of Satyam board on December 16 wherein some of the independent directors had put some caveats in the resolution for acquiring two Maytas firms owned by IT company's founder and Chairman B Ramalinga Raju.
Asked if the independent directors of the disbanded Satyam board would get any immunity from the financial fraud, disclosed by Raju who is now being investigated by various agencies, Gupta said, "I won't like to comment as investigations are going on."
