Hello,
I am making a few assumptions and within these parameters I will respond.
- We are talking about a company registered under Indian Companies Act 1956 and is bound by compliances under the act.
- There are more than two Directors and if the number is even, the chairman will have the casting vote on resolutiions.
- The organization is making good business.
- There are more reasons to his exit than his misbehaviour with employees and his political connections.
Having set out the premises let us look at other facts:
- The organization is an economic organization being propelled by bottom line compulsions.
- Employee grievances cannot be the sole or primary cause leading to his removal.
Procedural part of the removal will have to be stipulated by a good and competent Company Secretary and none of are upto advising the procedure.
Removing a Director (and especially such a one) is tricky business as it will entail "costs and calamities" that cannot be fully estimated. My concern will be to take a good and as accurate as is possible, a stock of these factors before proceeding with terminal action.
If the organization is a Private limited one the Articles of Association will have provisions to by him out on the basis of "fair value" of his shareholding (which a good CA and/or CS can provide). If it is not possible for existing remaining Directors, it is possible to bring in an outsider and settle a "negotiated price" for his shares.
If the organization is a "Partnership Firm", similar provisions will exist in the registered partnership deed.
But whatever the matter the question asked to you in the interview and shared by you is an involved question that demands deep scrutiny, legally and operationally. It is impossible to provide "the" answer on this forum.
Even I have shared just a few pointers. The ultimate answer is, "Yes, by following a stipulated procedure only he can be removed." But more important that this aspect is the aspect of "costs and calamities" need near accurate assessment and the necessary willingnes and ability to face these. Such removal decisions cannot be taken or implemented in an unholy haste.
I suppose the interviewers were not expecting "the" answer but wanted look at your general knowledge, approach and maturity! And this comes by experience.
Regards
samvedan
July 05, 2011
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