MCA vide Notification No. G.S.R. 431(E) on Monday 7th May, 2018 notified the Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2018 to amend the Companies (Appointment and Qualification of Directors) Rules,2014 (hereinafter referred to as the principal rules), wherein rule 5 shall be numbered as sub-rule (1) thereof, and after subrule (1) as so numbered, the following sub-rule shall be inserted, namely:-
“(2) None of the relatives of an independent director, for the purposes of sub-clauses (ii) and (iii) of clause (d) of sub-section (6) of section 149,- (i) is indebted to the company, its holding, subsidiary or associate company or their promoters, or directors; or (ii) has given a guarantee or provided any security in connection with the indebtedness of any third person to the company, its holding, subsidiary or associate company or their promoters, or directors of such holding company, for an amount of fifty lakhs rupees, at any time during the two immediately preceding financial years or during the current financial year.” .
And In the principal rules, in rule 16, for the word “shall”, the word “may” shall be substituted.
The said Notification can be accessed from the following link: MCANotf.dt 7.5.18_Co.(App. & Qualifiction of Directors)Rules, 2018