MCA plans to frame tougher regulations for independent directors

Meanwhile, the Centre is working on final rules for the National Financial Reporting Authority (NFRA) to regulate auditors

The corporate affairs ministry is planning to frame rules to make independent directors more accountable for malpractice. Besides, it is also mulling action against 42 auditors that have resigned from companies.

According to a ministry official, an independent director cannot say he does not approve of what is happening in the company, and must put his foot down.
 

The ministry has already moved the National Company Law Tribunal against seven independent directors. Once the judgment is issued, the ministry will notify the new rules for independent directors.

According to the Companies Act, 2013, independent directors must constitute one-third of the