Distribution of gift at agm
Y.K. Gupta
(Querist) 15 April 2012
This query is : Resolved
Hi,
Please provide the details in relation to the decision given by the Calcutta High Court in Jay Engineering Ltd. case.
If there are some other cases on the cited subject, please do send the details of them.
Thanks & regards,
Y.K. Gupta
ajay sethi
(Expert) 15 April 2012
The government is proposing to ban distribution of gifts and food coupons at the Annual General Meetings of companies, as these activities distract shareholders from serious business.
"No company shall offer any other thing except tea, coffee, soft drinks and snacks etc in the AGM...Any other gifts, food coupons or gift coupons and other enticement shall be treated as misconduct on the part of board of directors of the company," the Corporate Affairs Ministry said in draft circular.
Inviting comments from stakeholders on the draft circular, the MCA said the directors of such companies will have to pay back the cost of such expenses to the company and would also be liable for the penal action under section 168 of the Companies Act, 1956, for not convening the AGM as required.
"It has also been brought to the notice that the companies offer gifts, extravagant food and other charms to shareholders who attend AGM to divert the attention of the shareholders from the main purpose of AGM and their right of key role in the management of the company through AGM," the MCA said.
It added that the Secretarial Standards on General Meeting issued by the Institute of Company Secretaries of India also specifically mentioned that no gifts, gifts coupons or cash in lieu of gifts should be distributed to the members at or in connection with the meeting.
The draft would be available for comments and recommendations from stakeholders till the August 14, 2011.
Devajyoti Barman
(Expert) 15 April 2012
Go through it as cited below-
AIR 1973 Cal 413
ajay sethi
(Expert) 15 April 2012
ABSTRACT
State Public Sector Undertakings - Economy in expenditure — providing Gifts to the
shareholders during Annual General Meeting (AGM) of the State Public Sector
Undertakings - Reg.
Finance (BPE) Department
G.O.Ms.No. 5 Dated: 6.1.2012
Read:
G.O.Ms.No. 27, Finance (BPE) Department, dated: 21.1.2002.
ORDER:
In the Government order read above, Government have issued certain
guidelines for observance of economy in expenditure by the State Public Sector
Undertakings and among other things, it has been specifically indicated that
economy in expenditure should be observed while holding conferences, seminars
and meetings.
2) Keeping the Principles of good Corporate Governance, Government of
India
Ministry of Corporate Affairs, New Delhi vide F.No. 17/218 / 2011 / CL.V /
dated: July 2011 have decided that (a) no company shall offer any other thing except
tea, coffee, soft drinks and snacks etc., in the Annual General Meeting(AGM) and the
same i.e., tea, coffee, soft drinks and snacks etc., may be made available before the
start of the meeting as a courtesy to the shareholders (b) distribution of any other
gifts, food coupons or gift coupons and other enticement during AGM shall be treated
as misconduct on the part of board of directors of the Company (c) the directors of
such companies shall be liable to pay back the cost of such expenses to the
company and shall also be liable for the penal action as provided under section 168
of the Companies Act, 1956 for not convening the AGM properly as required under
section 166 of the Companies Act, 1956. Government of India have requested all the
stakeholders to consider and examine the above proposal and have also sought for
the views / comments / recommendations of all stakeholders in this regard.implement the same in the State Public Sector Undertakings of Tamil Nadu in order
to strengthen the financial position of the State Public Sector Undertakings.
Accordingly, while reiterating the orders already issued in the Government Order
read above for maintaining economy in expenditure, as a part of austerity measures,
and to maintain the principle of good Corporate governance, Government direct that
the State Public Sector Undertakings shall not offer / distribute any gifts in any form
(like gifts, vouchers, food coupons, travel tickets, smart cards, products of the
company etc.,) to their stakeholders at the time of Annual General Meetings.
The Chief Executive Officers of State Public Sector Undertakings are
requested to place this G.O. before the Board of Directors in the next meeting for
adoption.
K. Shanmugam
Principal Secretary to Government
To
The Chief Executive Officers of all State Public Sector Undertakings
The Secretary to Government, All Departments of Secretariat, Chennai-9.
Copy to
All Finance Directors
The Accountant General, Chennai-6/18.
SF/Spare.
I Forwarded / By Order /
Assistant Director
Y.K. Gupta
(Querist) 15 April 2012
Sir,
Thanks for your prompt reply. I am well aware about facts you have mentioned in your reply and Govt. has not taken any decision so far on the matter. Can you please provide the details as asked for in my previous e-mail?
Regards,
Y.K. Gupta
Shonee Kapoor
(Expert) 15 April 2012
What query remains after the detailed discussion above?
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
prabhakar singh
(Expert) 16 April 2012
judgment that he wants but i am not aware of.
