Thursday, September 19, 2019

Kannur airport clears stand on audit row

Kannur:  In the wake of the row over the denial of permission for comptroller and auditor general (CAG) to conduct the audit of the airport, the authorities of Kannur International Airport (Kial) have said the decision to appoint a private auditor was taken by the shareholders of the company at their annual general meeting (AGM).
It was only after detailed legal scrutiny that the board of directors and the shareholders of the company decided this, said a press release. The accounts of the airport were being audited by private auditors appointed by the CAG till 2017-18.
The procedure for auditing the annual accounts of companies is laid down in Section 139 (1-4) of the Companies Act, 2013 (Act), said Kial, which said the auditor is to be appointed by the shareholders in their AGM.
Appointment of auditors for government companies and companies controlled by the government is laid down in section 139 (5&7) of the Act, and the CAG appoints auditors for such companies, it added. The statement also reiterated that Kial is not a government company, which has been clarified in the state government letter of January 5, 2018.
According to the Companies Act, a government company means any company in which has not less than 51% of the paid-up capital is held by the Central and state governments, it added. But the central government does not have any shares in Kannur airport, while the state government has 35% share in the company, it explained.
Further, as per the articles of Association of Kannur airport, the state government can appoint only one-third of the directors (including the chairman and the managing director) as long as it holds not less than 26% of the equity capital. It is therefore clear that the government cannot appoint a majority of directors, said Kial.
19/09/10 Times of India
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