malaika 21 January 2021

private limited company

We are a private limited company with 3 directors. As two directors are weak in operations and one is smart... The smart one has appointed an auditor and giving him 5.000 MONTHLY FEES last 3 years. This smart director has appointed an Independent Director to work in his behalf and did not upload his documents with ROC. The smart director has travelled on company expenses saying its official work, but results are zero. Now he says he is agreed to resign and that we should pay him 1 lakh. We tried to get the bank statement, but bank refused saying that the Smart Director’s signature is needed. Please help how to get justice by claiming back the money for fake expenses he has done with on company account? Can we approach the COMPANY LAW BOARD. And How do we get rid of the Independent director without informing him?

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Quick Summary

This discussion concerns a private limited company where one director is suspected of misappropriating company funds through inflated auditor fees and questionable travel expenses. The other directors are seeking advice on how to recover these funds, potentially by engaging a new auditor to investigate, issuing a show cause notice, and if necessary, filing an FIR. They also wish to remove an independent director without direct notification and are exploring options with the Company Law Board.

2 Replies

Real Soul.... (LEGAL) 21 January 2021

If you have proof for his misappropiation of compnay funds, it is advised to file an FIR, however issue a show cause notice first .

Dr J C Vashista (Advocate) 22 January 2021

The directors should engage some other auditor to unearth amount spent by such director and pressurise active director to settle accounts before his /her resignation is accepted.

If some embazzlement is found/ reported get a FIR lodged.