1. Airlines should appoint directors only after security nod: Government

Airlines should appoint directors only after security nod: Government

Airline companies should appoint directors only after receiving security clearance and they have at least 90 days time to make the appointment under the companies law, according to the Civil Aviation Ministry.

By: | New Delhi | Published: May 29, 2017 7:38 PM
airlines director appointment rule, government rule of airlines director appointment, appointment of airlines director, Companies (Appointment and Qualification of Directors) Rules The ministry has come across instances where airline companies have been found violating norms by appointing directors on their boards without getting prior security nod from the government. (Reuters)

Airline companies should appoint directors only after receiving security clearance and they have at least 90 days time to make the appointment under the companies law, according to the Civil Aviation Ministry. The ministry has come across instances where airline companies have been found violating norms by appointing directors on their boards without getting prior security nod from the government.

While reiterating that airline companies would face punitive action in case of violations with respect to appointment of directors, the ministry said it is felt that there might not be difficulty in complying with the prior security clearance requirement.

Ninety days’ period or time till next board meeting is available with the companies for appointment of directors under the provisions of Companies (Appointment and Qualification of Directors) Rules, the ministry said in an order issued earlier this month.

These rules come under the Companies Act, 2013 — which is implemented by the Corporate Affairs Ministry.

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“Therefore, it is felt that there may not be any difficulty in compliance with the provisions of company rules, 2014 as well as Civil Aviation Requirement (CAR) for seeking prior security clearance of proposed directors being appointed in the applicant company,” the order said.

As per CAR, a new director or chairman should not be appointed unless the security clearance is obtained from the Home Ministry through the Civil Aviation Ministry.

This is applicable for scheduled as well as non-scheduled airline operators. “In case of any violation of the provisions of the CAR, Ministry will be constrained to take punitive action against the company concerned,” the order said. In an order dated January 13, the Civil Aviation Ministry had advised all airlines are advised not to appoint directors on their board without prior security clearance from it.

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