Mr. Nanavati holding 3 percent shares in OPQ Ltd

., became a director of this company on 1.5.2000. The company, prior to his appointment as director,

had commenced transactions with A Ltd. In the next Board meeting to be held on 10.5.2000, the Board proposes to discuss about price revisions sought

for by A Ltd. Briefly explain:

(i) Whther Mr. Nanavati should make a disclosure of his interest in A Ltd., assuming that the company is going to have transactions with A Ltd. on a

continuous basis; if yes, when and how? When should it be renewed?

(ii) Can he vote in the price revision resolution in the Board Meeting?

You are informed that Mr. Nanavati holds 1.5 per cent of the share capital of A Ltd. and that his wife holds another 3 per cent of the share capital of A Ltd.

[November, 2000]

8. After serious disagreement and difference of opinion among the shareholders of the

company in the last annual general meeting, some of the directors took the steps as

noted below. Discuss the validity and effect of the following:

(i) Mr. John, the managing director sends his notice of resignation.

(ii) Mr. Paul, an ordinary director verbally resigns and not in writing.

(iii) Mr. David, another ordinary director, had sent his resignation, but withdrew it before the Board meeting was held for accepting his resigna tion. [May, 1999]

9. The managing Director of M/ s Speculative Builders Ltd. has resigned as the

company was not doing well and also incurring losses. The Board of Directors have decided to appoint Mr. Reliable aged 71 years as the new Managing Director, because of his proven track record of nearly 50 years, turning sick

companies into profitable ones. The only condition put forth by Mr. Reliable is that he should be paid the maximum permissible salary and perquisites as

provided in the Companies Act without requiring the approval of Central Government. The effective capital of the company is Rs. 20 crores. Advise the

company about (i) the procedure to be followed for the appointment of Mr. Reliable, and (ij) the

quantum of remuneration payable to him. [May, 19991

10. James Brown, Blue Brown, Vasisht Beg and Ramen Roy are the directors ofJohn Brown and Company Limited. Vasisht Beg and Ramen Roy did not

attend the Board meeting which was properly convened. At the said Board meeting two additional directors were appointed. They are wife and brother of

James Brown and Blue Brown respectively, the directors who attended the board meeting. Explain with reference to the relevant provisions of the

Companies Act whether the directors who attended the Board meeting are entitled to vote on the subject matter and whether the appointment of additional

directors is valid.