Skip to content

CS Professional · Labour Laws and Practice · Social Security Legislations

Arun, a member of the Central Board and a director of Kaveri Textiles Ltd, learns that a matter before the Board would benefit Kaveri directly. What must he do under the Code?

He must disclose the nature of his interest as soon as possible, have the disclosure recorded in the proceedings, and afterwards refrain from taking part in any proceeding or decision on that matter. Section 8(5) does not require resignation, and disclosure alone does not allow him to vote.

  1. ADisclose the nature of his interest, have it recorded, and not take part in proceedings or decisions on that matterCorrect
  2. BDisclose the interest but he may still vote on the matter
  3. CResign from the Board immediately
  4. DTake no action, as only the Chairperson must disclose interests

Explanation

Section 8(5) requires a member who is a director of a company with a direct or indirect pecuniary interest in a matter to disclose the nature of the interest as soon as possible, have it recorded in the proceedings, and then not take part in any proceeding or decision on that matter. Voting after disclosure is barred, and resignation is not required.

Did you get it right without looking?

One question tells you little. A timed set on Social Security Legislations shows your real accuracy, how long you take and where you lose marks.

Practise Social Security LegislationsFree diagnostic mock

More Social Security Legislations questions