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CS Professional · Compliance Management, Audit and Due Diligence · Compliance Framework

Meridian Pharma Ltd. restates its FY 2022-23 statements due to fraud. Mr. Bose, the wholetime director during that year, resigned in 2024 and now holds no office. The board proposes to take no action as he is no longer in the company. What is the correct position under Section 199?

The company must still recover the excess remuneration from Mr. Bose. Section 199 applies to any past or present managing director, wholetime director, manager or Chief Executive Officer who received remuneration during the period being restated, so his resignation does not release him.

  1. ANo recovery is possible once a director has resigned
  2. BRecovery can be made only from directors in office on the date of restatement
  3. CThe company must recover from him the excess remuneration, since the section covers past as well as present personsCorrect
  4. DRecovery is possible only from his legal heirs after death

Explanation

Section 199 expressly covers any past or present managing director, wholetime director, manager or CEO who received remuneration during the restated period. Resignation therefore does not remove the obligation to recover the excess.

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