Medking Ltd is required to have vigil mechanism and has an existing Audit Committee Mr A is a m...........

Companies Act-Phase (I & II) Board-powersandMeetings

Medking Ltd. is required to have vigil mechanism and has an existing Audit Committee. Mr. A is a member of this Audit Committee and Chairperson. Besides, he is a consultant to Goodmeds Ltd., who supply raw material to Medking Ltd. Mr. Truthful an employee in the testing department found the supplies of Goodmeds to be substandard and accused Mr. A of accepting kickbacks. And brought this to notice of the higher-ups. After no response to his complaint he approached the Audit Committee. Mr. A who is also the Chairman of Audit Committee participated in the ensuing discussions. Can Mr A participate in such business of Audit Committee despite the apparent conflicts of interest?

No, as the Companies Act requires a person having conflict of interest to recuse himself from deliberations on those matters.

Yes, provided that such resolutions passed as a result of deliberations are further ratified at Board Meeting

None of these.

May be

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Explanation:

under the Old Companies Act, a conflicted director was prohibited from voting on a matter or agreement in which he/she was interested after making a disclosure but he/she could attend the meeting and participate in the deliberations of the matter or agreement at the discretion of the board. This is in stark contrast to section 75 of the Companies Act which provides that a conflicted director is not only required to recuse himself/herself from voting on a matter where he/she has a conflicting interest, but must also recuse himself/herself from the relevant meeting and may not take part in the consideration of the matter except to disclose the interest and its general nature or any material information relating to the matter;