Business Ethics and Corporate Governance, Second Edition

FRAUDULENT PERSONS

Section 203 of the Companies Act gives power to the court to restrain fraudulent persons from managing companies. According to it, the court may issue an order that any of the following persons shall not, without its consent, act as a director, or take part in the promotion, formation or management of a company for a period not exceeding five years: (i) a person who is convicted of any offence in connection with the promotion or management of a company or (ii) a person who in the course of winding up of a company (i) has been guilty of fraudulent conduct of business or (ii) has otherwise been guilty, while being an officer of the company, of any fraud or misfeasance in relation to the company or of any breach of his duty to ...