Recovery of remuneration in certain cases
📚 Law Minded summary
Where a company has to restate its financial statements because of fraud or non-compliance, it must claw back what it overpaid.
Remuneration, including stock options, received by any past or present managing director, whole-time director, manager or chief executive in excess of what the restated accounts justify has to be recovered for the two preceding financial years.
Without prejudice to any liability incurred under the provisions of this Act or any other law for the time being in force, where a company is required to re-state its financial statements due to fraud or non-compliance with any requirement under this Act and the rules made thereunder, the company shall recover from any past or present managing director or whole-time director or manager or Chief Executive Officer (by whatever name called) who, during the period for which the financial statements are required to be re-stated, received the remuneration (including stock option) in excess of what would have been payable to him as per restatement of financial statements.
All sections in Chapter XIII — Appointment and Remuneration of Managerial Personnel