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CAG Flags Governance Failures in J&K Companies
7 Oct
Summary
- Most J&K public enterprises missed mandatory board meetings in 2022-23.
- Nearly three-fourths of 33 enterprises failed to hold required board meetings.
- Annual general meetings also significantly missed by J&K firms.
A significant number of Jammu and Kashmir's public sector enterprises (PSEs) failed to adhere to corporate governance norms during the 2022-23 fiscal year. The Comptroller and Auditor General (CAG) reported that the majority of these entities did not conduct the minimum required board meetings.
Out of 33 active enterprises, only nine held the statutory four board meetings, while 24 fell short. Notably, 10 enterprises held no board meetings at all. This non-compliance violates Section 173(1) of the Companies Act, 2013.
The failures extended to mandatory Annual General Meetings (AGMs), with 24 of the 33 enterprises failing to conduct them. This oversight contravenes Section 96 of the Companies Act, 2013, highlighting widespread governance deficiencies.
Further audit findings revealed critical gaps in appointing independent directors and constituting essential committees like Audit and Nomination and Remuneration Committees. Only one enterprise, J&K Bank Limited, met the requirements for these critical oversight bodies. Additionally, a substantial number of enterprises lacked qualified Company Secretaries.
